Chipmaker Broadcom unveiled a $130bn offer, including net debt, for Qualcomm on Monday, in what could be the largest tech deal in history.

Under Broadcom’s proposal, Qualcomm shareholders would receive $70 per share — $60 in cash and $10 in shares of its rival. It would value Qualcomm’s equity at roughly $103bn.

Qualcomm is set to reject Broadcom’s takeover offer, as the US chipmaker views its rival’s $130bn proposal as too low and fraught with regulatory risks, people familiar with the matter said.

The offer represents a 28 per cent premium over Qualcomm’s share price on November 2, after it first emerged that Broadcom was preparing an offer. Broadcom also said that its offer stands whether or not Qualcomm completes its $38bn acquisition of NXP, which has yet to close.

If completed, it would be the biggest ever takeover in the technology sector and create a company with a combined market capitalisation of more than $200bn.

Hock Tan, chief executive and master dealmaker behind Broadcom, said the “proposal is compelling for stockholders and stakeholders in both companies”.

“Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company,” he said.

However, the offer is seen as opportunistic and highly risky from an antitrust perspective by Qualcomm’s senior management, according to people briefed on the situation. One of these people said that a $70-a-share offer was far from a level that Qualcomm’s board would consider seriously.

Another person added that the offer was opportunistic because Qualcomm’s share price had been depressed because of its licensing dispute with Apple. The shares traded as high as $81.97 in 2014, according to Reuters data.

The person added that once Qualcomm receives regulatory approval for its acquisition of NXP and solves the dispute with Apple, the stock would trade significantly higher.

If Mr Tan is ultimately successful in convincing Qualcomm’s board, its shareholders and regulators of the merits of the deal, it will cap a stunning run of multibillion-dollar deals for the semiconductor industry in general and Broadcom in particular.

Chipmakers are jostling for position amid the shift from an industry dominated by personal computers and smartphones to a world of self-driving cars and the heterogeneous “internet of things”, all fuelled by the emergence of 5G wireless networking. This has already triggered Softbank’s $32bn takeover of Arm and Intel’s $17bn purchase of Altera, as well as Qualcomm’s recent $39bn bid for NXP.

Qualcomm’s mobile processors and modems, backed by a strong portfolio of intellectual property that underpins cellular communications in most modern mobile phones, have left it well placed as the rollout of 5G begins in the next few years.

Broadcom sells a wide range of chip designs for networking equipment, from back-end telecoms infrastructure to the WiFi and Bluetooth controllers in the latest iPhones.

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