Intel is all set to acquire Broadcom in order to prevent the American Semiconductor manufacture from getting into a merger deal with Qualcomm- all a part of a defensive strategy to prevent the creation of a powerhouse competitor.
According to a post on Friday in The Wall Street Journal, Intel advisors have come up with a thinking to purchase Broadcom, before the business plans to ingest Qualcomm, in one of the most speculated multi-billion dollar worth acquisition deal.
Readers of Cybersecurity Insiders have to make a note of a fact that early this year, Broadcom offered a $121 billion acquisition deal to Qualcomm. But the latter rejected the deal as Qualcomm thought that the amount did not fairly value the company as per the current business standards.
Coming to the market share occupied by Qualcomm and Broadcom, both can be touted as leaders in the mobile market, and both are always found rapidly expanding their portfolios in the market of Internet of Things.
So, Broadcom’s acquisition of Qualcomm could have brought in a major revolution into the market of silicon chips offered to the mobile markets, which eventually did not happen due to some reasons are best known to Qualcomm.
Obviously, Intel would have never wanted this deal to turn into a reality, as the deal would have evolved into a major competition against its business.
Perhaps to prevent the merger, Intel is offering Broadcom a lucrative offer ($127 billion), before the latter decided to acquire Qualcomm.
Industry analysts say that Intel is left with only a few options other than its purchase plan of Broadcom. Either it has to go as said above or start executing several smaller acquisitions to maintain competitive standing.
Note- Broadcom’s market capitalization was above $112 billion at the close of trading on the NASDAQ on Friday. So, if Intel offers a package of $127 billion, then it might easily force the Broadcom board members to say ‘Yes’ to the merger with Intel. Currently, an official word from Broadcom officials on a merger with Intel is awaited!