US chipmaker Qualcomm agrees takeover of UK's Alphawave
US chipmaker Qualcomm has agreed a $2.4bn (£1.8bn) takeover of Alphawave - a deal set to result in another UK tech firm falling into foreign hands.
Shareholders in the UK firm, which designs semiconductors attractive in artificial intelligence (AI) development, will receive 183p per share under the terms.
The price represents a 95% premium to that seen before Qualcomm disclosed its interest.
News of the agreement was announced as the annual London Tech Week got under way in the capital, with Prime Minister Sir Keir Starmer speaking of tech's importance to the UK's prospects.
Softbank-owned chipmaker ARM - previously a London-listed firm before it was snapped up under a £32bn deal in 2016 - had also been chasing Alphawave but has since walked away.
The UK company's "serdes" technology is said to be the main prize within the deal.
It underpins the speed at which data is processed by chips - crucial for AI development.
Qualcomm said the deal would bolster its enhancement of AI. Its chips have been widely used by Apple and Samsung though its interest in iPhones has recently been curtailed through the development of Apple's own chip components.
Alphawave said it considered the terms of the cash offer to be fair and reasonable and that it intended to unanimously recommend it to its shareholders.
In his speech marking the start of London Tech Week, the PM said tech and AI were "absolutely central" to the UK.
Cheap valuations and a weak pound have made UK firms attractive to US investors in recent years while a number of UK listed firms have shifted primary listings to the United States in a bid to attract greater investment.
The government has moved to make UK listings more attractive as part of its growth agenda.
The prime minister launched a new free government partnership with industry, including Nvidia, Amazon, Google and BT, to train 7.5 million UK workers in essential skills to use AI by 2030.
A separate "TechFirst" initiative will roll out AI training to every secondary school over three years.
Sir Keir told the audience in central London: "AI and tech makes us more human, which sounds an odd thing to say, but it's true.
"We need to say it because... some people out there are sceptical.
"They do worry about AI taking their job."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
17 minutes ago
- Reuters
Qualcomm bypasses logic gate with $2 bln UK deal
LONDON, June 9 (Reuters Breakingviews) - Artificial intelligence is so fast-moving and potentially all-encompassing that it makes sense for technology giants to pay up just to stay relevant. Look at all the money Microsoft (MSFT.O), opens new tab and (AMZN.O), opens new tab have poured into large language model developers OpenAI and Anthropic. That helps to explain why $162 billion semiconductor behemoth Qualcomm (QCOM.O), opens new tabagreed, opens new tab to buy $2.4 billion UK-based Alphawave (AWE.L), opens new tab on Monday. Overpaying to have a chance at cracking the massive AI data centre market is worthwhile for CEO Cristiano Amon. The deal has been a while in the making. Reuters reported in April that $140 billion chip architecture licenser Arm had considered buying Alphawave, which has a range of intellectual property related to semiconductors, with the aim of developing AI processors. That deal didn't happen, but Qualcomm's now has. The two sides agreed a price that implies a 96% premium to Alphawave's March 31 undisturbed level. Amon is giving the target's investors the option of receiving cash, shares or a special new security that will eventually turn into Qualcomm stock. The latter consideration seems designed to allow Alphawave's founders, who own a special type of share, to participate on the same economic terms as everyone else. On the surface, the price looks punchy. The offered enterprise value is $2.4 billion, according to a joint statement. With analysts pencilling in just $46 million of EBITDA this year for Alphawave, based on estimates gathered by LSEG, the implied multiple exceeds 50, compared with about 35 on average for peers Marvell Technology (MRVL.O), opens new tab, Credo Technology (CRDO.O), opens new tab, InterDigital (IDCC.O), opens new tab and Astera Labs (ALAB.O), opens new tab. Still, Amon isn't buying Alphawave for near-term earnings. The deal gives Qualcomm a shot at growing into the massive data-centre market, which is all the more important because the company needs to diversify away from smartphones. Key customer Apple is seeking to reduce its reliance on Qualcomm kit for iPhones. The market for AI data centre central processing units – or CPUs, which are like the brain of a computing system – is growing at a handy 10% compound annual rate, according to figures cited by JPMorgan analysts. Marvell, Broadcom (AVGO.O), opens new tab and others are already making moves and laying claim to turf that Qualcomm might like to own. Alphawave's high-speed intellectual property helps connect chips and move data around quickly, which could boost Amon's product offering as he seeks to build on the recent success of signing up a major Saudi Arabian data-centre customer. The good news is that this is a manageable bet relative to Qualcomm's size. The outlay is equivalent to less than one quarter's free cash flow, according to forecasts gathered by Visible Alpha. Given that, and the chance to unlock the next leg of growth, Amon arguably can't afford not to try. Follow Karen Kwok on LinkedIn, opens new tab and X, opens new tab.
The Independent
38 minutes ago
- The Independent
Warning over 10% price hike trick when paying by card abroad this summer
Holidaymakers could see costs rise by 10 per cent this summer as 'dynamic currency conversion' (DCC) provides traders with tempting opportunities to profit from people paying with plastic. DCC, also known as 'cardholder preferred currency', has been around for many years. Hotels, restaurants and shops with significant numbers of tourists often provide the option to pay at a fixed conversion rate. The appeal to the traveller is that they will know instantly how much they have spent in sterling. But they are certain to lose out on the transaction. The practice looks harmless: simply an additional choice. When you ask to pay with plastic or a card stored on a mobile phone abroad, the terminal will often display two figures: the bill in euros (EUR) or other local currency, and a figure in pounds (GBP). Some holidaymakers may fondly assume that the sterling amount is the equivalent to the local currency at current exchange rates. In fact, the cost in pounds includes a margin of up to 10 per cent. This is pocketed by the bank, which passes some of the cash back to the merchant. Anyone who avails of dynamic currency conversion is voluntarily accepting a price increase that could add £1 to every £10 spent – a fast way to lose a slice of hard-earned cash. Many holidaymakers know, when asked abroad if they would like to pay a sterling amount rather than the local currency, always to say 'No'. When offering dynamic currency conversion, merchants are supposed to follow strict guidelines: But during the course of a journey through Europe this month, it has become clear that some traders are not playing fair. Once local currency has been selected, that should be the end of it. But some card machines are programmed to come up with another screen, typically reading: 'Do you accept that if you choose not to take advantage of the guaranteed exchange rate, you will be subject to whatever rate the card company uses?' Below it, there is a box marked 'Accept' and another, 'Reject'. Customers who are paying attention will select 'Accept' because they understand that their bank will just use the appropriate prevailing rate – and that it will be better than the DCC deal. But if 'Accept' is selected, it turns out to be applied to a different question, ie 'Do you accept the DCC rate of exchange?' The correct, counter-intuitive answer is 'Reject'. Some proprietors may not even let customers get this far. After a satisfying lunch of dumplings and tea at a restaurant on the Royal Route leading south from the Old Town of Warsaw, the waiter simply selected 'GBP' on the machine, adding 10 per cent to the cost of the meal. When challenged about this scam, he claimed the machine was faulty and that nothing could be done. For holidaymakers withdrawing cash abroad, ATMs generally offer dynamic currency conversion. It should also be declined. The profitability to the bank becomes clear by noting the GBP sum, selecting local currency and afterwards checking the account online to see the actual sum debited by the bank.
The Independent
38 minutes ago
- The Independent
Rachel Reeves warned against ‘unacceptable' London snub in spending review
London Mayor Sadiq Khan is urging Rachel Reeves to increase funding for London in the upcoming spending review, particularly for transport projects and the Metropolitan Police. Sources close to Khan warn it would be "unacceptable" if London doesn't receive the necessary funds, accusing Reeves of potentially pursuing an "anti-London agenda" similar to previous Conservative governments. City Hall is concerned London may not receive any of the £113 billion unlocked for infrastructure spending, with key priorities including extending the Docklands Light Railway and the Bakerloo underground line. Reeves has indicated a focus on prioritising spending outside of London and the South East, allocating over £15 billion to mayoral authorities in other regions. The spending review is expected to allocate a significant boost to the NHS, with other departments, including the Home Office, facing budget squeezes.
