Broadcom Proposes to Acquire Qualcomm for $70.00 per Share in Cash and Stock in Transaction Valued at $130 Billion

Broad­com Pro­po­sal Stands Whe­ther Qualcomm’s Pen­ding Acqui­si­ti­on of NXP is Con­sum­ma­ted on the Cur­r­ent­ly Dis­c­lo­sed Terms of $110 per Sha­re or the NXP Tran­sac­tion is Ter­mi­na­ted
Broad­com and Qual­comm, Inclu­ding NXP, Will Have Pro For­ma Fis­cal 2017 Reve­nues of Appro­xi­mate­ly $51 Bil­li­on and EBITDA of Appro­xi­mate­ly $23 Bil­li­on, Inclu­ding Syn­er­gies
Deli­vers Imme­dia­te, Sub­stan­ti­al and Com­pel­ling Pre­mi­um for Qual­comm Stock­hol­ders
Sil­ver Lake Part­ners Pro­vi­des $5 Bil­li­on Con­ver­ti­ble Debt Finan­cing Com­mit­ment Let­ter to Sup­port Tran­sac­tion

SAN JOSE, Calif., Nov. 6, 2017 /PRNewswire/ — Broad­com Limi­ted (NASDAQ: AVGO) (“Broad­com”), a lea­ding semi­con­duc­tor device sup­plier to the wired, wire­less, enter­pri­se sto­ra­ge, and indus­tri­al end mar­kets, today announ­ced a pro­po­sal to acqui­re all of the out­stan­ding sha­res of Qual­comm Incorpo­ra­ted (NASDAQ: QCOM) (“Qual­comm”) for per sha­re con­s­i­de­ra­ti­on of $70.00 in cash and stock.

Under Broadcom’s pro­po­sal, the $70.00 per sha­re to be recei­ved by Qual­comm stock­hol­ders would con­sist of $60.00 in cash and $10.00 per sha­re in Broad­com sha­res. Broadcom’s pro­po­sal rep­res­ents a 28% pre­mi­um over the clo­sing pri­ce of Qual­comm com­mon stock on Novem­ber 2, 2017, the last unaf­fec­ted tra­ding day pri­or to media spe­cu­la­ti­on regar­ding a poten­ti­al tran­sac­tion, and a pre­mi­um of 33% to Qualcomm’s unaf­fec­ted 30-day volu­me-weight­ed average pri­ce. The Broad­com pro­po­sal stands whe­ther Qualcomm’s pen­ding acqui­si­ti­on of NXP Semi­con­duc­tors N.V. (“NXP”) is con­sum­ma­ted on the cur­r­ent­ly dis­c­lo­sed terms of $110 per NXP sha­re or the tran­sac­tion is ter­mi­na­ted. The pro­po­sed tran­sac­tion is valued at appro­xi­mate­ly $130 bil­li­on on a pro for­ma basis, inclu­ding $25 bil­li­on of net debt, giving effect to Qualcomm’s pen­ding acqui­si­ti­on of NXP on its cur­r­ent­ly dis­c­lo­sed terms.

Broadcom’s 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,” said Hock Tan, Pre­si­dent and Chief Exe­cu­ti­ve Offi­cer of Broad­com. “This com­ple­men­ta­ry tran­sac­tion will posi­ti­on the com­bi­ned com­pa­ny as a glo­bal com­mu­ni­ca­ti­ons lea­der with an impres­si­ve port­fo­lio of tech­no­lo­gies and pro­ducts. We would not make this offer if we were not con­fi­dent that our com­mon glo­bal custo­mers would embrace the pro­po­sed com­bi­na­ti­on. With grea­ter sca­le and broa­der pro­duct diver­si­fi­ca­ti­on, the com­bi­ned com­pa­ny will be posi­tio­ned to deli­ver more advan­ced semi­con­duc­tor solu­ti­ons for our glo­bal custo­mers and dri­ve enhan­ced stock­hol­der value.”

Tan con­ti­nued, “We have gre­at respect for the com­pa­ny foun­ded 32 years ago by Irwin Jacobs, Andrew Viter­bi and their col­leagues, and the revo­lu­tio­na­ry tech­no­lo­gies they deve­lo­ped. Fol­lo­wing the com­bi­na­ti­on, Qual­comm will be best posi­tio­ned to build on its lega­cy of inno­va­ti­on and inven­ti­on. Given the com­mon strengths of our busi­nes­ses and our sha­red heri­ta­ge of, and con­ti­nued focus on, tech­no­lo­gy inno­va­ti­on, we are con­fi­dent we can quick­ly rea­li­ze the bene­fits of this com­pel­ling tran­sac­tion for all sta­ke­hol­ders. Import­ant­ly, we belie­ve that Qual­comm and Broad­com employees will bene­fit from sub­stan­ti­al oppor­tu­nities for growth and deve­lop­ment as part of a lar­ger com­pa­ny.”

Tho­mas Krau­se, Broad­com Chief Finan­ci­al Offi­cer, added, “The Broad­com busi­ness con­ti­nues to per­form very well. Broad­com has com­ple­ted five major acqui­si­ti­ons sin­ce 2013, and has a pro­ven track record of rapidly dele­ver­aging and suc­cess­ful­ly inte­gra­ting com­pa­nies to crea­te value for our stock­hol­ders, employees and custo­mers. Given the com­ple­men­ta­ry natu­re of our pro­ducts, we are con­fi­dent that any regu­la­to­ry requi­re­ments necessa­ry to com­ple­te a com­bi­na­ti­on with Qual­comm will be met in a time­ly man­ner. We look for­ward to enga­ging imme­dia­te­ly in dis­cus­sions with Qual­comm so that we can sign a defi­ni­ti­ve agree­ment and com­ple­te this tran­sac­tion expe­di­tious­ly.”

Stra­te­gic and Finan­ci­al Bene­fits

  • Crea­tes a Lea­ding Diver­si­fied Com­mu­ni­ca­ti­ons Semi­con­duc­tor Com­pa­ny: Qualcomm’s cel­lu­lar busi­ness is high­ly com­ple­men­ta­ry to Broadcom’s port­fo­lio, and the com­bi­na­ti­on will crea­te a strong, glo­bal com­pa­ny with an impres­si­ve port­fo­lio of tech­no­lo­gies and pro­ducts.
  • Acce­le­ra­tes Inno­va­ti­on to Deli­ver More Advan­ced Semi­con­duc­tor Solu­ti­ons to Glo­bal Custo­mers: As a result of enhan­ced sca­le, reach and finan­ci­al fle­xi­bi­li­ty, the com­bi­ned com­pa­ny will bene­fit from the abi­li­ty to acce­le­ra­te inno­va­ti­on and deli­ver more advan­ced semi­con­duc­tor solu­ti­ons to its broad glo­bal custo­mer base.
  • Com­pel­ling Finan­ci­al Bene­fits: The com­bi­ned com­pa­ny will have an enhan­ced finan­ci­al pro­fi­le, bene­fiting from Broadcom’s pro­ven ope­ra­ting model with indus­try-lea­ding mar­gins. The com­bi­ned Broad­com and Qual­comm, inclu­ding NXP, will have pro for­ma fis­cal 2017 reve­nues of appro­xi­mate­ly $51 bil­li­on and pro for­ma 2017 EBITDA of appro­xi­mate­ly $23 bil­li­on, inclu­ding syn­er­gies. The tran­sac­tion is expec­ted to be accre­ti­ve to Broadcom’s Non-GAAP EPS in the first full year after clo­se.

The com­bi­ned com­pa­ny is expec­ted to have an invest­ment gra­de credit rating and strong cash flow gene­ra­ti­on to faci­li­ta­te rapid dele­ver­aging.

Appro­vals and Finan­cing

Broadcom’s pro­po­sal was unani­mous­ly appro­ved by the Board of Direc­tors of Broad­com. Broad­com is pre­pa­red to enga­ge imme­dia­te­ly in dis­cus­sions with Qual­comm to work toward a mutual­ly accep­ta­ble defi­ni­ti­ve agree­ment and is ready to devo­te all necessa­ry resour­ces to fina­li­ze the necessa­ry docu­men­ta­ti­on on an expe­di­tious basis.

The pro­po­sed tran­sac­tion will not be sub­ject to any finan­cing con­di­ti­on. BofA Mer­rill Lynch, Citi, Deut­sche Bank, J.P. Mor­gan and Mor­gan Stan­ley have advi­sed Broad­com in wri­ting that they are high­ly con­fi­dent that they will be able to arran­ge the necessa­ry debt finan­cing for the pro­po­sed tran­sac­tion. Sil­ver Lake Part­ners, which has ser­ved as a stra­te­gic part­ner to Broad­com in pri­or tran­sac­tions, has pro­vi­ded Broad­com with a com­mit­ment let­ter for a $5 bil­li­on con­ver­ti­ble debt finan­cing in con­nec­tion with the tran­sac­tion.

Broad­com expects that the pro­po­sed tran­sac­tion would be com­ple­ted wit­hin appro­xi­mate­ly 12 mon­ths fol­lo­wing the signing of a defi­ni­ti­ve agree­ment.

Redo­mic­i­le Announ­ce­ment

As pre­vious­ly announ­ced on Novem­ber 2, 2017, Broad­com intends to redo­mic­i­le to chan­ge the par­ent com­pa­ny of the Broad­com cor­po­ra­te group from a Sin­g­a­po­re com­pa­ny to a U.S. cor­po­ra­ti­on.

Let­ter to Qual­comm

The full text of a let­ter sent to Qual­comm is below.

Novem­ber 6, 2017

Board of Direc­tors
Qual­comm Incorpo­ra­ted
5775 Moreh­ou­se Dri­ve
San Die­go, CA 92121

Dear Mem­bers of the Board of Direc­tors:

On behalf of Broad­com, I am plea­sed to sub­mit this pro­po­sal to acqui­re Qual­comm in a tran­sac­tion that will pro­vi­de Qual­comm stock­hol­ders with an imme­dia­te, sub­stan­ti­al and com­pel­ling pre­mi­um to the value that would be achiev­a­ble by Qual­comm on a stan­da­lo­ne basis, as well as the oppor­tu­ni­ty to par­ti­ci­pa­te in the upsi­de poten­ti­al of the com­bi­ned com­pa­ny. 

As you know from pri­or dis­cus­sions bet­ween our two com­pa­nies, Broad­com has been inte­rested for some time in com­bi­ning Qualcomm’s mobi­le busi­ness with the Broad­com plat­form. We con­ti­nue to belie­ve that such a com­bi­na­ti­on will deli­ver sub­stan­ti­al bene­fits to our respec­tive stock­hol­ders, employees, custo­mers and other sta­ke­hol­ders. We are hope­ful that you will agree that the pro­po­sal we out­line in this let­ter pres­ents a com­pel­ling oppor­tu­ni­ty for Qual­comm stock­hol­ders to rea­li­ze both pre­sent and future value for their Qual­comm sha­res. 

Stra­te­gic Ratio­na­le

We have gre­at respect for the lega­cy Qual­comm has built sin­ce its foun­ding more than 30 years ago by Irwin Jacobs, Andrew Viter­bi and their col­leagues. Based on our know­ledge of the semi­con­duc­tor indus­try, we belie­ve that the­re is a signi­fi­cant stra­te­gic, finan­ci­al and ope­ra­tio­nal ratio­na­le for the pro­po­sed tran­sac­tion. A com­bi­na­ti­on of Qual­comm and Broad­com will crea­te a strong, glo­bal com­pa­ny with an impres­si­ve port­fo­lio of indus­try-lea­ding tech­no­lo­gies and pro­ducts. Given the high­ly com­ple­men­ta­ry natu­re of our busi­nes­ses, we are con­fi­dent that our glo­bal custo­mers will embrace the pro­po­sed com­bi­na­ti­on as we work stra­te­gi­cal­ly with them to deli­ver more advan­ced value-added semi­con­duc­tor solu­ti­ons.

Sin­ce I dis­cus­sed a com­bi­na­ti­on with Ste­ve in August of last year, Broad­com has suc­cess­ful­ly com­ple­ted the inte­gra­ti­on of the Broad­com-Ava­go com­bi­na­ti­on, de-leve­r­ed its balan­ce sheet and mea­ning­ful­ly increa­sed reve­nues and pro­fi­ta­bi­li­ty. As a result, Broad­com stock­hol­ders have been rewar­ded with a 55% appre­cia­ti­on in Broadcom’s stock pri­ce sin­ce that time, ran­king in the top 10% among the S&P 500 over that peri­od. We belie­ve the­se fac­tors, cou­pled with our histo­ry of suc­cess­ful acqui­si­ti­ons and inte­gra­ti­ons, clear­ly demons­tra­te our com­mit­ment and abi­li­ty to imple­ment value-enhan­cing tran­sac­tions and deli­ver robust results for stock­hol­ders, employees, custo­mers and other sta­ke­hol­ders. 

Pro­po­sed Terms

We are offe­ring Qual­comm stock­hol­ders $70.00 per sha­re, con­sis­ting of $60.00 per sha­re in cash and $10.00 per sha­re in Broad­com sha­res. This rep­res­ents a signi­fi­cant pre­mi­um of 28% to the clo­sing pri­ce of Qual­comm com­mon stock on Novem­ber 2, 2017, the last unaf­fec­ted tra­ding day pri­or to media spe­cu­la­ti­on regar­ding a poten­ti­al tran­sac­tion, and a pre­mi­um of 33% to Qualcomm’s unaf­fec­ted 30-day volu­me-weight­ed average pri­ce. Our pro­po­sal stands whe­ther your pen­ding acqui­si­ti­on of NXP is con­sum­ma­ted on the cur­r­ent­ly dis­c­lo­sed terms of $110 per sha­re or that tran­sac­tion is ter­mi­na­ted.

Our pro­po­sal will enab­le Qual­comm stock­hol­ders to achie­ve both imme­dia­te cash value and the abi­li­ty to par­ti­ci­pa­te in the future suc­cess of the com­bi­ned enter­pri­se, which will bene­fit from grea­ter sca­le and broa­der pro­duct diver­si­fi­ca­ti­on. The com­bi­na­ti­on of our two com­pa­nies and asso­cia­ted syn­er­gies will be accre­ti­ve to Broadcom’s earnings, which will direct­ly bene­fit Qual­comm stock­hol­ders through their equi­ty ownership in the com­bi­ned com­pa­ny. We have signi­fi­cant expe­ri­ence with acqui­ring and inte­gra­ting com­pa­nies and an esta­blished track record of deli­vering finan­ci­al results for our stock­hol­ders. I am con­fi­dent that we can deli­ver simi­lar results for our com­bi­ned stock­hol­ders should we con­sum­ma­te this tran­sac­tion.

Finan­cing

The pro­po­sed tran­sac­tion will not be sub­ject to any finan­cing con­di­ti­on. BofA Mer­rill Lynch, Citi, Deut­sche Bank, J.P. Mor­gan and Mor­gan Stan­ley have advi­sed us in wri­ting that they are high­ly con­fi­dent that they will be able to arran­ge the necessa­ry debt finan­cing for the pro­po­sed tran­sac­tion. Sil­ver Lake Part­ners, which has ser­ved as a stra­te­gic part­ner to Broad­com in pri­or tran­sac­tions, has pro­vi­ded Broad­com with a com­mit­ment let­ter for a $5 bil­li­on con­ver­ti­ble debt finan­cing in con­nec­tion with the tran­sac­tion. We also expect to main­tain our invest­ment gra­de credit rating fol­lo­wing the pro­po­sed tran­sac­tion. We and our advi­sors are avail­ab­le to review our finan­cing plans with you at your con­ve­ni­en­ce.

Regu­la­to­ry Appro­vals

We and our advi­sors have con­duc­ted exten­si­ve ana­ly­sis of the regu­la­to­ry appro­vals that will be requi­red in con­nec­tion with the pro­po­sed tran­sac­tion, and we are con­fi­dent that the tran­sac­tion will recei­ve all necessa­ry appro­vals in a time­ly man­ner. We would not make this offer if we were not con­fi­dent that our com­mon glo­bal custo­mers would embrace the pro­po­sed com­bi­na­ti­on, and we do not anti­ci­pa­te any mate­ri­al anti­trust or other regu­la­to­ry issu­es that would extend the nor­mal time­ta­ble for clo­sing a tran­sac­tion of this natu­re. 

Employees

We have a long histo­ry of pro­vi­ding out­stan­ding oppor­tu­nities for lea­dership and growth to employees, inclu­ding busi­ness unit lea­ders, of com­pa­nies we acqui­re. Employees who have joi­ned our com­pa­ny as a result of acqui­si­ti­ons have beco­me an inte­gral part of our busi­ness, and we look for­ward to the oppor­tu­ni­ty to wel­co­me Qualcomm’s employees to Broad­com. 

Con­clu­si­on

We belie­ve that our pro­po­sal rep­res­ents the most attrac­tive, value-enhan­cing alter­na­ti­ve avail­ab­le to Qual­comm stock­hol­ders, and that it is in the best inte­rests of both par­ties to pro­ceed as soon as pos­si­ble to reach agree­ment on a tran­sac­tion struc­tu­re and terms. We are ready to devo­te all necessa­ry resour­ces to fina­li­ze all docu­men­ta­ti­on on an expe­di­tious basis. We and our advi­sors are pre­pa­red to enga­ge in dis­cus­sions imme­dia­te­ly to work toward a mutual­ly bene­fi­ci­al tran­sac­tion. 

We look for­ward to working with you to com­ple­te this tran­sac­tion suc­cess­ful­ly and sug­gest that our respec­tive finan­ci­al and legal advi­sors and seni­or manage­ment team meet at your ear­liest con­ve­ni­en­ce to work toward this goal.

This let­ter does not con­sti­tu­te a bin­ding obli­ga­ti­on or com­mit­ment of eit­her com­pa­ny to pro­ceed with any tran­sac­tion. No such obli­ga­ti­ons will in any event be impo­sed on eit­her par­ty unless and until a mutual­ly accep­ta­ble defi­ni­ti­ve agree­ment is for­mal­ly ent­e­red into by both par­ties.

Sin­ce­rely, 

/s/ Hock Tan

Hock Tan
Pre­si­dent and Chief Exe­cu­ti­ve Offi­cer

Advi­sors

Moe­lis & Com­pa­ny LLC, Citi, Deut­sche Bank, J.P. Mor­gan, BofA Mer­rill Lynch and Mor­gan Stan­ley are acting as finan­ci­al advi­sors to Broad­com. Wach­tell, Lip­ton, Rosen & Katz and Lat­ham & Wat­kins LLP are acting as legal coun­sel.

Addi­tio­nal Mate­ri­als

An inves­tor pre­sen­ta­ti­on and info­gra­phic regar­ding Broadcom’s pro­po­sal will be filed with the Secu­ri­ties and Exchan­ge Com­mis­si­on and is avail­ab­le on the Inves­tor Rela­ti­ons page of Broadcom’s web­site.

About Broad­com Limi­ted

Broad­com Limi­ted (NASDAQ:AVGO) is a lea­ding desi­gner, deve­l­oper and glo­bal sup­plier of a broad ran­ge of digi­tal and ana­log semi­con­duc­tor con­nec­tivi­ty solu­ti­ons. Broad­com Limited’s exten­si­ve pro­duct port­fo­lio ser­ves four pri­ma­ry end mar­kets: wired infra­st­ruc­tu­re, wire­less com­mu­ni­ca­ti­ons, enter­pri­se sto­ra­ge and indus­tri­al & other. App­li­ca­ti­ons for our pro­ducts in the­se end mar­kets inclu­de: data cen­ter net­wor­king, home con­nec­tivi­ty, set-top box, broad­band access, tele­com­mu­ni­ca­ti­ons equip­ment, smart­pho­nes and base sta­ti­ons, data cen­ter ser­vers and sto­ra­ge, fac­to­ry auto­ma­ti­on, power gene­ra­ti­on and alter­na­ti­ve ener­gy sys­tems, and elec­tro­nic dis­plays.

For­ward-Loo­king State­ments

This com­mu­ni­ca­ti­on con­ta­ins for­ward-loo­king state­ments (inclu­ding wit­hin the mea­ning of Sec­tion 21E of the United Sta­tes Secu­ri­ties Exchan­ge Act of 1934, as amen­ded, and Sec­tion 27A of the United Sta­tes Secu­ri­ties Act of 1933, as amen­ded) con­cer­ning Broad­com and Qual­comm. The­se state­ments inclu­de, but are not limi­ted to, state­ments that address Broadcom’s expec­ted future busi­ness and finan­ci­al per­for­mance and state­ments about (i) pro­po­sed tran­sac­tion invol­ving Broad­com and Qual­comm and the expec­ted bene­fits of the pro­po­sed tran­sac­tion, (ii) the expec­ted bene­fits of other acqui­si­ti­ons, (iii) Broadcom’s plans, objec­tives and inten­ti­ons with respect to future ope­ra­ti­ons and pro­ducts, (iv) Broadcom’s com­pe­ti­ti­ve posi­ti­on and oppor­tu­nities, (v) the impact of acqui­si­ti­ons on the mar­ket for Broadcom’s pro­ducts, and (vi) other state­ments iden­ti­fied by wor­ds such as “will”, “expect”, “belie­ve”, “anti­ci­pa­te”, “esti­ma­te”, “should”, “intend”, “plan”, “poten­ti­al”, “pre­dict”, “pro­ject”, “aim”, and simi­lar wor­ds, phra­ses or expres­si­ons. The­se for­ward-loo­king state­ments are based on cur­rent expec­ta­ti­ons and beliefs of the manage­ment of Broad­com, as well as assump­ti­ons made by, and infor­ma­ti­on cur­r­ent­ly avail­ab­le to, such manage­ment, cur­rent mar­ket trends and mar­ket con­di­ti­ons and invol­ve risks and uncer­tain­ties, many of which are out­side Broadcom’s and management’s con­trol, and which may cau­se actu­al results to dif­fer mate­ri­al­ly from tho­se con­tai­ned in for­ward-loo­king state­ments. Accord­in­gly, you should not place undue reli­an­ce on such state­ments.

Such risks, uncer­tain­ties and assump­ti­ons inclu­de: the ulti­ma­te out­co­me of any pos­si­ble tran­sac­tion bet­ween Broad­com and Qual­comm, inclu­ding the pos­si­bi­li­ty that Qual­comm will reject the pro­po­sed tran­sac­tion with Broad­com; uncer­tain­ties as to whe­ther Qual­comm will coope­ra­te with Broad­com regar­ding the pro­po­sed tran­sac­tion; the effect of the announ­ce­ment of the pro­po­sed tran­sac­tion on the abi­li­ty of Broad­com and Qual­comm­to retain custo­mers, to retain and hire key per­son­nel and to main­tain favor­able rela­ti­ons­hips with sup­pliers or custo­mers; the timing of the pro­po­sed tran­sac­tion; the abi­li­ty to obtain regu­la­to­ry appro­vals and satis­fy other clo­sing con­di­ti­ons to the com­ple­ti­on of the pro­po­sed tran­sac­tion (inclu­ding share­hol­der appro­vals); and other risks rela­ted to the com­ple­ti­on of the pro­po­sed tran­sac­tion and actions rela­ted the­re­to. Other risks, uncer­tain­ties and assump­ti­ons that could mate­ri­al­ly affect future results inclu­de: any risks asso­cia­ted with loss of Broadcom’s signi­fi­cant custo­mers and fluc­tua­ti­ons in the timing and volu­me of signi­fi­cant custo­mer demand; Broadcom’s depen­dence on con­tract manu­fac­tu­rers and out­sour­ced sup­ply chain; any acqui­si­ti­ons Broad­com may make, as well as delays, chal­len­ges and expen­ses asso­cia­ted with recei­ving governmen­tal and regu­la­to­ry appro­vals and satis­fy­ing other clo­sing con­di­ti­ons, and with inte­gra­ting acqui­red com­pa­nies with Broadcom’s exis­ting busi­nes­ses and Broadcom’s abi­li­ty to achie­ve the bene­fits, growth pro­s­pects and syn­er­gies expec­ted from such acqui­si­ti­ons, inclu­ding Broadcom’s pen­ding acqui­si­ti­on of Bro­ca­de Com­mu­ni­ca­ti­ons Sys­tems, Inc. and Broadcom’s pro­po­sed acqui­si­ti­on of Qual­comm; the abi­li­ty of Broad­com to inte­gra­te Qualcomm’s busi­ness and make chan­ges to its busi­ness model, and to resol­ve legal pro­cee­dings, governmen­tal inves­ti­ga­ti­ons and custo­mer dis­pu­tes rela­ting to Qualcomm’s licen­sing prac­tices; Broadcom’s abi­li­ty to accu­ra­te­ly esti­ma­te custo­mers’ demand and adjust Broadcom’s manu­fac­tu­ring and sup­ply chain accord­in­gly; Broadcom’s signi­fi­cant indeb­ted­ness, inclu­ding the sub­stan­ti­al indeb­ted­ness Broad­com expects to incur in con­nec­tion with Broadcom’s pro­po­sed acqui­si­ti­on of Qual­comm, and the need to gene­ra­te suf­fi­ci­ent cash flows to ser­vice and repay such debt; depen­dence on and risks asso­cia­ted with dis­tri­bu­tors of Broadcom’sproducts; Broadcom’s abi­li­ty to impro­ve its manu­fac­tu­ring effi­ci­en­cy and qua­li­ty; increa­sed depen­dence on a small num­ber of mar­kets; quar­ter­ly and annu­al fluc­tua­ti­ons in ope­ra­ting results; cycli­ca­li­ty in the semi­con­duc­tor indus­try or in Broadcom’s tar­get mar­kets; glo­bal eco­no­mic con­di­ti­ons and con­cerns; Broadcom’s com­pe­ti­ti­ve per­for­mance and abi­li­ty to con­ti­nue achie­ving design wins with its custo­mers, as well as the timing of tho­se design wins; rates of growth in Broadcom’s tar­get mar­kets; pro­lon­ged dis­rup­ti­ons of Broadcom’s or its con­tract manu­fac­tu­rers’ manu­fac­tu­ring faci­li­ties or other signi­fi­cant ope­ra­ti­ons; Broadcom’sdependence on out­sour­ced ser­vice pro­vi­ders for cer­tain key busi­ness ser­vices and their abi­li­ty to exe­cu­te to its requi­re­ments; Broadcom’s abi­li­ty to main­tain or impro­ve gross mar­gin; Broadcom’s abi­li­ty to main­tain tax con­ces­si­ons in cer­tain juris­dic­tions; Broadcom’s abi­li­ty to pro­tect its intel­lec­tu­al pro­per­ty and the unpre­dic­ta­bi­li­ty of any asso­cia­ted liti­ga­ti­on expen­ses; any expen­ses or repu­ta­tio­nal dama­ge asso­cia­ted with resol­ving custo­mer pro­duct and war­ran­ty and indem­ni­fi­ca­ti­on claims; Broadcom’s abi­li­ty to sell to new types of custo­mers and to keep pace with tech­no­lo­gi­cal advan­ces; mar­ket accep­tan­ce of the end pro­ducts into which Broadcom’s pro­ducts are desi­gned; and other events and trends on a natio­nal, regio­nal and glo­bal sca­le, inclu­ding tho­se of a poli­ti­cal, eco­no­mic, busi­ness, com­pe­ti­ti­ve and regu­la­to­ry natu­re.

Broadcom’s filings with the Secu­ri­ties and Exchan­ge Com­mis­si­on (“SEC”), which you may obtain for free at the SEC’s web­site at http://www.sec.gov, dis­cuss some of the important risk fac­tors that may affect Broadcom’sbusiness, results of ope­ra­ti­ons and finan­ci­al con­di­ti­on. Broad­com under­ta­kes no intent or obli­ga­ti­on to publicly update or revi­se any of the­se for­ward loo­king state­ments, whe­ther as a result of new infor­ma­ti­on, future events or other­wi­se, except as requi­red by law.

Addi­tio­nal Infor­ma­ti­on

This com­mu­ni­ca­ti­on does not con­sti­tu­te an offer to buy or soli­ci­ta­ti­on of an offer to sell any secu­ri­ties.  This com­mu­ni­ca­ti­on rela­tes to a pro­po­sal which Broad­com has made for an acqui­si­ti­on of Qual­comm.  In fur­t­her­an­ce of this pro­po­sal and sub­ject to future deve­lop­ments, Broad­com (and, if a nego­tia­ted tran­sac­tion is agreed, Qual­comm) may file one or more regis­tra­ti­on state­ments, pro­xy state­ments, ten­der offer state­ments or other docu­ments with the SEC.  This com­mu­ni­ca­ti­on is not a sub­sti­tu­te for any pro­xy state­ment, regis­tra­ti­on state­ment, ten­der offer state­ment, pro­s­pec­tus or other docu­ment Broad­com and/or Qual­comm may file with the SECin con­nec­tion with the pro­po­sed tran­sac­tion.

Inves­tors and secu­ri­ty hol­ders of Broad­com and Qual­comm are urged to read the pro­xy statement(s), regis­tra­ti­on state­ment, ten­der offer state­ment, pro­s­pec­tus and/or other docu­ments filed with the SEC care­ful­ly in their ent­i­re­ty if and when they beco­me avail­ab­le as they will con­tain important infor­ma­ti­on about the pro­po­sed tran­sac­tion.  Any defi­ni­ti­ve pro­xy statement(s) or prospectus(es) (if and when avail­ab­le) will be mai­led to stock­hol­ders of Broad­com and/or Qual­comm, as app­li­ca­ble.  Inves­tors and secu­ri­ty hol­ders will be able to obtain free copies of the­se docu­ments (if and when avail­ab­le) and other docu­ments filed with the SEC by Broad­com through the web site main­tai­ned by the SEC at http://www.sec.gov.

This docu­ment shall not con­sti­tu­te an offer to sell or the soli­ci­ta­ti­on of an offer to buy any secu­ri­ties, nor shall the­re be any sale of secu­ri­ties in any juris­dic­tion in which such offer, soli­ci­ta­ti­on or sale would be unla­w­ful pri­or to regis­tra­ti­on or qua­li­fi­ca­ti­on under the secu­ri­ties laws of any such juris­dic­tion.  No offe­ring of secu­ri­ties shall be made except by means of a pro­s­pec­tus mee­ting the requi­re­ments of Sec­tion 10 of the U.S. Secu­ri­ties Act of 1933, as amen­ded.

This com­mu­ni­ca­ti­on is neit­her a soli­ci­ta­ti­on of a pro­xy nor a sub­sti­tu­te for any pro­xy state­ment or other filings that may be made with the SEC.  None­theless, Broad­com and its direc­tors and exe­cu­ti­ve offi­cers and other mem­bers of manage­ment and employees may be deemed to be par­ti­ci­pants in the soli­ci­ta­ti­on of pro­xies in respect of the pro­po­sed tran­sac­tions.  You can find infor­ma­ti­on about Broadcom’s exe­cu­ti­ve offi­cers and direc­tors in Broadcom’s defi­ni­ti­ve pro­xy state­ment filed with the SEC on Febru­ary 17, 2017.  Addi­tio­nal infor­ma­ti­on regar­ding the inte­rests of such poten­ti­al par­ti­ci­pants will be inclu­ded in one or more regis­tra­ti­on state­ments, pro­xy state­ments, ten­der offer state­ments or other docu­ments filed with the SEC if and when they beco­me avail­ab­le. The­se docu­ments (if and when avail­ab­le) may be obtai­ned free of char­ge from the SEC’swebsite http://www.sec.gov.