NEW YORK, Nov. 6 (Xinhua) -- Broadcom, the U.S. semiconductor giant, said on Monday that it made an unsolicited offer to buy rival chip maker Qualcomm in a deal of over 100 billion U.S. dollars that would be the largest acquisition in the history of the tech sector.
Broadcom's 70 dollars a share bid consists of 60 dollars in cash and 10 dollars per share in Broadcom stock, which would value Qualcomm at more than 100 billion dollars.
"Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company," said Hock Tan, President and Chief Executive Officer of Broadcom, in a statement.
Broadcom's proposal represents a 28 percent premium over the closing price of Qualcomm common stock on Thursday, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 percent to Qualcomm's unaffected 30-day volume-weighted average price.
Shares of Qualcomm surged over 12 percent on Friday amid speculation that Broadcom was preparing a bid.
The Broadcom proposal stands whether Qualcomm's pending acquisition of NXP Semiconductors N.V. is consummated on the currently disclosed terms of 110 dollars per NXP share or the transaction is terminated.
Broadcom proposed transaction is valued at approximately 130 billion dollars on a pro forma basis, including 25 billion dollars of net debt, giving effect to Qualcomm's pending acquisition of NXP on its currently disclosed terms.
"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products," Tan added. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination."
However, Qualcomm is widely expected to resist Broadcom's unsolicited proposal, arguing it has been undervalued.
Shares of Broadcom rose 2.05 percent to trade at 279.25 dollars apiece in early Monday trading. Shares of Qualcomm rose 4.4 percent to trade at 64.53 dollars apiece.
