Shares of wireless chip technology giant Qualcomm (QCOM), at $81 billion in market cap, are up $3.86, or nearly 7%, at $58.70, and were up 9% at one point, following a headline from Bloomberg that even bigger giant Broadcom (AVGO) is "exploring a possible takeover" of Qualcomm.
Broadcom is speaking to advisers and the offer of about $70 (53.57 pounds) a share would include cash and stock, Bloomberg reported earlier, citing people familiar with the matter.
As for Broadcom, its CEO Hock Tan has a huge appetite when it comes to acquisitions and states that he is interested in more deals, which could be halted thanks to the intervention of US regulators since Qualcomm is a USA -based technology company. At present time, no final decisions have been made. Broadcom fell slightly to trade up about 1 per cent, for a market valuation of $107-billion. Qualcomm has a market cap of around $92 billion as of writing while Broadcom is worth almost $113 billion.
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Reports in The Wall Street Journal and elsewhere say Apple is contemplating kicking Qualcomm out of its devices entirely, possibly replacing it with Intel chips. Qualcomm's shares soared 12.71% on the rumor, or $6.97, to $61.81.
At issue are the licensing fees that Qualcomm charges for patents that cover the basics of how mobile phone systems work.
Qualcomm, based in San Diego, is also confronting headwinds in closing its $47 billion purchase of NXP Semiconductors. The deal is facing regulatory examination in Europe and opposition from some shareholders including activist hedge fund firm Elliott Management Corp., which has argued the offer undervalues NXP.
A tie-up between the two chipmakers would be the latest in the semiconductor industry that has been rapidly consolidating as companies try to capture a big share of the fast-growing market for connected devices and connected cars.