Broadcom planning to takeover Qualcomm in a record deal

Broadcom, one of Qualcomm's rival in the wireless chipset space is reportedly made an unsolicited takeover bid of $130 billion to Qualcomm. The bid would make Broadcom a powerhouse and a leader in chips used in more than 1 billion smartphones sold each year.

A tie-up between the two chipmakers would be the latest in the semiconductor industry that has been rapidly consolidating as companies try to capture a big share of the fast-growing market for connected devices and connected cars. If happens, this deal would create a company with a combined market capitalisation of more than $200bn and would be the largest ever in the technology industry.

According to a  Bloomberg report, Broadcom is speaking to advisers and the offer of about $70 a share would include cash and stock. Both the companies have not confirmed anything yet.

The combination of Broadcom and Qualcomm would create a colossus that controls key pieces required for any company that wants to build a smartphone. Meanwhile, Qualcomm is in the process of acquiring NXP Semiconductors NV, another major chip supplier. If those two join Broadcom, it would be the world’s third-largest chipmaker, with huge sway over the supply chain for phones and a growing presence in connected cars and data centers.

Earlier this year, Apple filed a lawsuit accusing Qualcomm of misusing its position in phone chips to bolster profits from technology licensing. Also, Apple is considering dropping Qualcomm chips from future iPhone and iPads, which would deliver a significant blow to the chipmaker's sales.