A smartphone with a displayed Qualcomm logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration
(Reuters) -U.S. chipmaker Qualcomm agreed to acquire Alphawave for about $2.4 billion on Monday, as it expands into the booming AI data center market, sending shares of the British semiconductor company surging more than 22%.
Alphawave, which designs semiconductor tech for data centers, is the latest British company to be snapped up in a market plagued by low valuations and stunted growth, with U.S. buyers swooping on firms at comparatively low prices and better-performing bourses proving more attractive for share listings.
It can help Qualcomm diversify into the data center market, as the biggest provider of smartphone chips looks to reduce its dependence on the industry.
Qualcomm, which counts Apple and major android players such as Xiaomi among its customers, has doubled-down on catering to industries such as data centers and personal computers as the iPhone maker increasingly turns to in-house processors.
"The acquisition of Alphawave Semi aims to further accelerate and provide key assets for Qualcomm's expansion into data centers," the company said.
Alphawave shareholders will receive 183 pence per share — a near 96% premium to the March 31 closing price immediately before Qualcomm disclosed its interest. News of the deal sent the stock up more than 22%. Shares of Qualcomm rose about 4%.
Qualcomm also made two alternative all-share offers for Alphawave on Monday after multiple deadline extensions from the UK takeover panel. However, Alphawave plans to unanimously recommend the cash offer to its shareholders, deeming it fair and reasonable.
Jefferies analysts said they do not expect the deal to meet any material regulatory obstacles, after Alphawave exited its Chinese joint venture, WiseWave.
"Alphawave has developed leading high-speed wired connectivity and compute technologies that are complementary to our power-efficient central processing unit and neural processing unit cores," Cristiano Amon, president and CEO of Qualcomm, said.
The acquisition is expected to close during the first calendar quarter of 2026.
SoftBank-owned Arm had also sought to acquire Alphawave but decided not to pursue the takeover, Reuters had reported in April citing sources.
(Reporting by Yamini Kalia and Arsheeya Bajwa in Bengaluru; Editing by Nivedita Bhattacharjee, Kirsten Donovan and Shilpi Majumdar)
