Apple supplier Qualcomm rejects initial $103B bid from another Apple supplier Broadcom

Apple’s cellular chip provider Qualcomm has turned down an unsolicited takeover bid of $103 billion, the bid was made by another Apple supplier, Broadcom. Qualcomm not only makes the Cellular chip for Apple but they also make the Snapdragon processors found in many Android phones.

Broadcom is best known for its Wi-Fi and Bluetooth modules, used in many electronics including Apple’s iPhone X. Whilst the initial bid has been rejected this is unlikely to be the end of acquisition talks.

In a statement seen by Reuters Broadcom states

“We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction.”

The company has stated that it’s hoping to engage with Qualcomm’s board and executives, and has received positive feedback not just from shareholders but customers as well. In rejecting Broadcom’s bid, Qualcomm argued that it “dramatically undervalues Qualcomm and comes with significant regulatory uncertainty.”

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If a takeover bid is not accepted Broadcom could potentially try for a hostile takeover, even submitting its own candidates for Qualcomm’s board of directors by the December 8th deadline and any merger would be one of the largest in history, and face serious scrutiny from U.S. antitrust regulators. Broadcom would have an unprecedented control over mobile devices. Either outcome would likely benefit Apple.