WALL STREET PAYDAY: Banks could earn $364 million from Broadcom's mega-bid for Qualcomm

  • Broadcom has announced a $US130 billion ($AU169 billion) takeover bid for fellow semiconductor giant Qualcomm.
  • It would be the largest tech acquisition of all time.
  • Wall Street bankers could earn as much as $US280 million ($AU364 million) in fees for advising on the deal.

Broadcom sent tremors through the semiconductor industry when it unveiled a $US130 billion bid for rival Qualcomm — a deal that, if successful, would be the largest tech takeover of all time.

The deal is also making waves on Wall Street, where bankers could earn a monster payday from the tie-up of the fourth- and sixth-largest chipmakers in the world.

Moelis & Co., Citi, Deutsche Bank, JPMorgan, Bank of America Merrill Lynch, and Morgan Stanley are each advising Broadcom on the potential merger, which came to light Friday, the day after Broadcom CEO Hock Tan made a high-profile visit to the White House to announce his company’s relocation to the United States.

Those banks could share between $US110 million and $US135 million in fees, according to Jeffrey Nassof, director of consulting firm Freeman & Co.

Bank of America, Citi, Deutsche Bank, JPMorgan, and Morgan Stanley are also helping arrange debt financing, and Silver Lake Partners has agreed to supply $US5 billion in convertible debt financing.

Qualcomm is reportedly resistant to the Broadcom’s overtures, which would face close regulatory scrutiny and a long path to completion.

The San Diego-based company, which has been in lengthy talks for its own proposed $US47 billion acquisition of NXP Semiconductors, hasn’t revealed its banking team for the Qualcomm deal, which would generate between $US120 million and $US145 million in fees, according to Nassof.

Goldman Sachs and Evercore have been advising Qualcomm on the NXP transaction.

All told, if the largest tech acquisition in history plays out, it could mean one of the largest Wall Street paydays in history, too: as much as $US280 million in advisory fees.

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