Semiconductor giant Qualcomm on Monday said it rejected the $130 billion unsolicited merger bid from fellow chip maker Broadcom which could represent the biggest-ever takeover in the tech sector.
Singapore-based Broadcom made the offer last week in what would have consolidated two major players in the booming sector fueled by growth in smartphones and other connected devices.
The proposal “significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, Qualcomm’s executive chairman, in a statement.
Steve Mollenkopf, Qualcomm’s chief executive, said the California company remains confident about its future.
“No company is better positioned in mobile, IoT (internet of things), automotive, edge computing and networking within the semiconductor industry,” he said.
“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 said, referring to the fifth generation wireless networks in the works.
But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets.
Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.
Broadcom’s proposal came days after its CEO Hock Tan appeared at the White House with President Donald Trump to announce plans to move the tech company back to the United States from Singapore.
It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.
A merger with Broadcom would create a behemoth with some $51 billion in revenues, including those from NXP.
Broadcom, meanwhile, is seeking to buy US rival Brocade Communications in a deal being reviewed by Washington.