Chip manufacturer Broadcom is proposing a $130 billion deal to purchase Qualcomm in what would be one of the biggest tech mergers in history.
On Monday, Broadcom made an unsolicited offer to pay $70 per share to buy its rival. For every share, the company would pay $60 in cash and $10 in Broadcom stock.
"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products,” Broadcom CEO Hock Tan said in a statement.
“With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value."
Qualcomm said in a statement that it had received the offer and its board of directors would be reviewing it.
The proposal comes days after Tan visited President Trump at the White House to announce that the Singapore-based company would be moving its operations to the U.S. Also at last week’s event were House Majority Leader Kevin McCarthy (R-Calif.) and Gary Cohn, a top White House economic adviser.
“He’s a highly, highly respected man, a great, great executive,” Trump said of Tan during the event.
“The job he’s done is an incredible job. But what he’s doing is committing to massive amounts of American jobs.”
The White House did not respond when asked by The Hill if the two had discussed the Qualcomm proposal.
Such a massive deal has the potential to invite scrutiny from regulators, but Tan said in a letter to Qualcomm that he was confident that the transaction would not raise any red flags for antitrust enforcers.
“We and our advisors have conducted extensive analysis of the regulatory approvals that will be required in connection with the proposed transaction, and we are confident that the transaction will receive all necessary approvals in a timely manner,” Tan wrote.
“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination, and we do not anticipate any material antitrust or other regulatory issues that would extend the normal timetable for closing a transaction of this nature.”
Reuters reported that Broadcom had not contacted Qualcomm about the offer prior to Tan’s letter.
According to the news outlet, Qualcomm is inclined to reject the offer as too low.
The companies are two of the world’s largest suppliers of smartphone components. They both supply mobile Wi-Fi technology to smartphone manufacturers, and Qualcomm is a major supplier of cellular communications components.
Singapore-based Broadcom would find in Qualcomm a partner that is much more established in the U.S. and influential among lawmakers. Qualcomm spends massive amounts of money on federal lobbying every year, having invested more than $6 million through the first three quarters of 2017.
But Qualcomm also carries some baggage. The company has been hit with lawsuits from the Federal Trade Commission and Apple, one of its biggest customers, over how it flexes its influence over the smartphone component market. Qualcomm has also been hit with massive fines from South Korean and Taiwanese regulators this year.
The chip maker has been in a long-running dispute with Apple, with the companies trading lawsuits over contract violations and intellectual property infringements. Apple is reportedly designing the next generation of iPhones and iPads without Qualcomm components.
This story was updated at 12:50 p.m.