Qualcomm to buy UK semiconductor company Alphawave: What it means for investors
Quotes on UK small-cap chip company Alphawave IP Group soared today, June 9, in London, rising more than a quarter to reach a one-year high. This came on the news of the company's acquisition by Qualcomm, which will buy Alphawave shares at a nearly 100% premium or exchange them for new Qualcomm stock. For Qualcomm, the deal is about expanding its technology for AI.
Details
Alphawave soared 26% to 187.9 pence (or GBP1.87) per share in trading today on the LSE. That's its highest mark since March 8, 2024.
The company announced an agreement whereby it will be bought by Aqua Acquisition, a wholly owned subsidiary of Qualcomm, one of the world's leading semiconductor companies and an Apple supplier. The deal is worth approximately $2.4 billion, or $2.48 (183 pence) per share. That's nearly 23% above Alphawave's closing price on Friday, the last trading day before the deal was announced. It also implies a 96% premium relative to March 31, when Alphawave and Qualcomm first disclosed the talks, noted Bloomberg.
Alphawave shareholders have the option to take cash for their shares or exchange them for 0.01662 newly issued shares of Qualcomm or for 0.00964 of a new “series A Qualcomm exchangeable security” and 0.00698 of a new “series B Qualcomm exchangeable security,» which will eventually be converted into Qualcomm shares as well, the acquisition announcement stated.
Alphawave recommendations to shareholders
The deal, expected to close in early 2026, still needs to be approved by Alphawave shareholders. Its board and advisors consider the cash offer and Qualcomm stock offer to be «fair and reasonable.» However, as noted in the acquisition announcement, they are «unable to form a view» on the other options «given the significant and variable impact of the advantages and disadvantages... for individual Alphawave shareholders.»
Investors representing 75% of Alphawave shares must vote in favor of the deal for it to go through, Bloomberg recalls. Shareholders and directors representing about 50% of shares have agreed to vote in favor of the deal, according to the company.
Why Qualcomm needs Alphawave
The acquisition of Alphawave, which designs and licenses semiconductor technology for data centers, is strategic for Qualcomm, which in May announced its return to the data center CPU market, writes Reuters. Alphawave attracted the attention of Qualcomm and chip tech provider Arm in early April for its technology that boosts data processing speed, which is «crucial for AI development,» Reuters noted previously.
«Together, we will unlock new opportunities for growth, drive innovation, and create a leading player in AI compute and connectivity solutions,» Tony Pialis, president and CEO of Alphawave, was quoted as saying in the acquisition announcement.
Qualcomm is trying to reduce its dependence on the smartphone market, where growth has slowed, and enter new markets, Bloomberg writes.
Context
The deal is the latest blow to the LSE, which has already been abandoned by a number of tech companies, noted the Guardian. This is due to takeovers by larger U.S. peers or because they want to move their listings to New York for better liquidity and higher valuations, the publication explained.
