Qualcomm, a well-known chip making company has rejected the acquisition offer from another chipmaker-Broadcom. The board of directors at Qualcomm has unanimously rejected the offer presented by Broadcom. Broadcom had made a formal public offer last week of $70 per share that put Qualcomm’s value at $130 billion.
In a statement issued by executive chairman and chairman of the board at Qualcomm, Paul Jacobs said, “It is the board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects.”
The unanimous decision from the board members expressed the company’s belief that the offer from Broadcom ‘dramatically undervalues Qualcomm.’ The board members have also expressed that the offer was not in the best interests of the shareholders.
“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry,” said CEO of Qualcomm, Steve Mollenkopf. “We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” he added.
It is true that Qualcomm is well positioned to lead the transition to 5G, once it can win over the legal dispute with Apple and maintain its dominance over the Android processor market! It still remains unclear how Broadcom will respond.