- Albert Gea/Reuters
The semiconductor giant Broadcom is exploring an acquisition of $80 billion Qualcomm, according to a Bloomberg News report on Friday citing people familiar with the matter. It would be the biggest-ever purchase of a semiconductor manufacturer.
Shares of Qualcomm surged roughly 15% on the news, while Broadcom’s stock climbed more than 3%.
According to the Bloomberg report, Broadcom is in talks with financial advisers but no final decisions have been made.
Broadcom, which has a market value of $110 billion, on Thursday announced it would move its headquarters to the US from Singapore.
Qualcomm is also trying to complete a $47 billion purchase of NXP Semiconductors.
It has been a quieter year for mergers-and-acquisitions activity so far in 2017 – with US inbound M&A volume for the first nine months at $199.3 billion, down 39% from last year, according to Dealogic – though the activity in semiconductors shows just how much consolidation is taking place.
Tech acquisitions, in particular, have dropped sharply. The sector’s M&A volume in the Americas reached $117.9 billion in the first nine months of 2017, a 58% decrease from the same period in 2016, Dealogic data shows.
However, John Waldron, a cohead of the investment-banking division at Goldman Sachs, recently told Business Insider he expected big-ticket M&A to pick up.
Of his firm’s debt operation, Waldron said, “If what we think is going to happen happens, which is more endgame consolidation, that would be really good for this business.”