Qualcomm has rejected Broadcom's $105 billion bid to buy the company, saying the proposal "significantly undervalues" the mobile chip maker.
On Monday, Qualcomm's board of directors unanimously turned down the offer, citing the chip maker's leading position in mobile tech and future growth prospects. "No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry," Qualcomm CEO Steve Mollenkopf said in a statement.
The board also cited "regulatory uncertainty." Broadcom and Qualcomm both develop Wi-Fi and Bluetooth chips, meaning a merger would likely draw antitrust scrutiny.
Broadcom, however, said it remains "fully committed" to buying Qualcomm. "This transaction will create a strong, global company," Broadcom CEO Hock Tan said in a statement.
"We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction," Tan said. "Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal. It remains our strong preference to engage cooperatively with Qualcomm's Board of Directors and management team."
Qualcomm has been locked in a costly legal battle with Apple over technology patents that's been creating doubts about Qualcomm's financial future. A Broadcom acquisition might be welcome relief for some Qualcomm stockholders. But analysts fear a merger might diminish competition in the smartphone industry, and kill innovation, paving the way for higher product prices.