Broadcom made an unsolicited $103 billion takeover offer for Qualcomm, which would be the largest tech acquisition ever. The Qualcomm board unanimously rejected the bid, citing concerns about undervaluation and regulatory issues. Broadcom then nominated its own slate of directors to replace Qualcomm's board. Qualcomm rejected these nominees as well. Broadcom increased its bid to $82 per share, or $146 billion total, but Qualcomm again rejected the bid, saying the breakup fee was inadequate and Broadcom would not clarify its plans for Qualcomm's licensing business. Qualcomm remains open to further talks with Broadcom about its acquisition offer.

1. QUALCOMM
ACQUISITION
(MAYBE)
RACHEL SCHLOBOHM
TEAM 3

2. THE PLAYERS
BROADCOM
PURCHASER
■ Revenue 2016 - $13.24B
■ Specializes in wired
communication technology
■ Markets
– Wired infrastructure
– Wireless communications
– Enterprise storage
QUALCOMM
TARGET
■ Revenue 2016 - $23.55B
■ Mobile chip maker
– Developed technology that
became foundation of all
digital cellular
communications
– Can both (1) sell chips and (2)
charge patent royalty for
almost all smartphones sold

3. THE
UNSOLICIDTED
BID
■ Broadcom made an unsolicited
$103B takeover offer to
Qualcomm
– Would end up being a $130B
deal (including the assumption
of Qualcomm’s debt)
■ Potential to be the tech industry’s
biggest deal ever
■ Proposal
– Cash & stock deal at
$70/share
– 60/share cash + $10/share
Broadcom stock
■ Qualcomm Board issued a news
release stating it would assess the
bid
NOVEMBER 6, 2017

4. WHAT FOLLOWED
■ November 13, 2017 – Qualcomm Board unanimously rejects bid
– Board consulted financial & legal advisers and determined:
■ (1) Bid “dramatically” undervalued company
■ (2) Regulatory hurdles / uncertainty
■ December 4, 2017 – Broadcom presents a slate of 11 independent
directors to replace the board at Qualcomm’s annual meeting on
March 6, 2018
■ December 22, 2017 – Qualcomm rejects the nominees
– Governance Committee concluded that they were inherently conflicted
■ Friday, January 5, 2018 – Broadcom filed definitive proxy statement
for new directors

5. RAISING
THE STAKES
■ Broadcom raises bid to $82/share
– Brought proposal to $146B
(with debt)
– “Best and final offer”
– Also pledged to:
■ Pay $8B breakup fee if
regulators veto deal, and
■ Pay additional cash if the
companies haven’t closed
within a year of announcing
the transaction
■ Qualcomm Board announced that,
as its fiduciary duties required, it
would review the revised proposal
FEBRUARY 5, 2018

6. THE
RESPONSE
QUALCOMM REJECTS
HEIGHTENED BID
•Similar reasoning as its
first rejection
•BUT announces it’s open to
meeting with Broadcom to
discuss its proposal
Feb. 8 2018
BROADCOM CUTS
NUMBER OF BOARD
SEATS SOUGHT FROM
11 TO 6
Feb. 13 2018
BROADCOM &
QUALCOMM HAVE 2
HOUR MEETING
Feb. 14 2018

7. AS IT STANDS
 Friday, February 16, 2018– Qualcomm rejects the heightened bid
(again)
 Reasoning
 $8B breakup fee inadequate
 Resisted other commitments regulatory bodies would likely require
 Broadcom wouldn’t comment on its intentions with Qualcomm’s licensing
business
 BUT Company is open to further talks . . .