Qualcomm Inc. (NASDAQ: QCOM) has raised its bid for NXP Semiconductors (NASDAQ: NXPI) to $127.50 in cash per share. Under the agreement, it also lowers Qualcomm’s minimum tender condition offer from 80 percent to 70 percent of NXP’s outstanding shares.
NXP shares rose by 6 percent on Tuesday morning after the opening bell.
Qualcomm has also entered into a binding agreement with nine NXP shareholders who collectively own 28 percent of NXP outstanding shares. Shareholders include Elliott Advisors Limited and Soroban Capital Partners.
Elliott, who refused Qualcomm’s previous offer of $110 per share saying it undervalued NXP, says it is pleased with Qualcomm’s new revised offer and has now agreed to the terms of the agreement.
Qualcomm said in a statement that due to NXP’s performance and strong market dynamics led the company to revise its offer.
“Qualcomm’s leading SoC capabilities and technology roadmap, coupled with NXP’s differentiated position in Automotive, Security and IoT, offers a compelling value proposition.” said Steve Mollenkopf, Chief Executive Officer of Qualcomm.
The two together will expand upon semiconductor chips which are highly used in smartphone manufacturers such as Android phones or Apple, but it will also expand its presence in the growing industry of chips for vehicles.
“The acquisition of NXP will enable us to accelerate our growth strategy. The Board unanimously believes this is an attractive acquisition.” said Tom Horton, Presiding Director of the Qualcomm Board of Directors.
The agreement between the two companies now raises pressure on Broadcom, who pursued to acquire Qualcomm previously. Broadcom proposed its final offer to Qualcomm of $121 billion, which Qualcomm rejected.
Qualcomm rejected the offer saying that Broadcom’s offer undervalues its company and that it would hurt its acquisition of NXP. Qualcomm said in a statement that it was opened to additional talks regarding the matter.
But if Broadcom does enter into an agreement to acquire Qualcomm, it would force Qualcomm to abandon its takeover attempt of NXP.
Qualcomm has extended its offer to NXP until March 5, 2018.