Back in November, Qualcomm found itself in the sights of Broadcom, receiving a massive $130 billion takeover offer. At the time, Qualcomm rejected the bid, stating that the amount offered did not truly represent the value of the company. Rumors of a hostile takeover brewed in the months that followed, leading up to Broadcom's increased $145 billion offer earlier this week. This was said to be Broadcom's ‘best and final offer', but it wasn't enough to sway the Qualcomm board.

Doing the math, $145 billion works out to $82 per share. However, Qualcomm has said that the offer was ‘unanimously' rejected, with the company arguing that it “falls well short of the firm regulatory commitment” required. Regulators across the world already have their eyes on Qualcomm, with various anti-trust cases out against the company, such a huge merger between Qualcomm and Broadcom would invite more regulator scrutiny and in a worst case scenario, governments could block the deal on anti-monopoly grounds.

In a letter to Broadcom CEO, Hock Tan, Qualcomm's chairman, Paul Jacobs expressed his regulatory concerns: “It is indisputable that there are significant regulatory hurdles in your proposed transaction. It is also indisputable that if Qualcomm entered into a merger agreement and, after an extended regulatory review period the transaction did not close, Qualcomm would be enormously and irreparably damaged.”

The door for a takeover isn't entirely closed though. The letter also goes on to note that “If you are not willing to agree to do whatever is necessary to ensure a transaction closes, we will need you to be extremely clear and specific about exactly what actions you would refuse to take, so that we can properly evaluate the risk to Qualcomm’s shareholders.”

Qualcomm and Broadcom's top brass will be meeting again to discuss all of this. From the sounds of it, if Broadcom can guarantee that the transaction will close, then an agreement could be reached. However, making such a guarantee is a tall order and may end up being impossible. Just this week, Apple caught the eyes of the European Commission with its proposed Shazam acquisition valued at just $400 million, a minor acquisition compared to Broadcom's proposed $145 billion+ bid.

KitGuru Says: The Broadcom/Qualcomm proposal has a huge set of challenges to overcome and ultimately, may not be possible. However, it doesn't sound like we've heard the last of this story just yet.

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