Broadcom's offer consists of $60 in cash and $10 in stock for each of Qualcomm's nearly 1.5 billion shares. A deal would be the largest ever in tech. Broadcom has reportedly been working on a deal for months.
Earlier deal chatter suggested Broadcom would offer Qualcomm $103 billion, but that the deal would be funded 75% by cash.
Qualcomm said its board "will assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders," the company said in a release, adding that it will "have no further comment until its Board of Directors has completed its review."
Acquiring Qualcomm, which is the world's largest maker of mobile phone chips, would make Broadcom the third-largest chipmaker in the tech industry, behind Intel Corp. (INTC) and Samsung Electronics Co. (SSNLF) .
The Broadcom proposal still stands whether Qualcomm's pending acquisition of NXP Seminconductors NV (NXPI) comes to fruition or is terminated. Qualcomm's bid for NXP is $110 per share.
Broadcom said in a statement on Monday that its bid for Qualcomm is valued at about $130 billion on a pro forma basis, including $25 billion in debt.
"We believe this deal would make sense, as we see significant cost synergies and the opportunity for AVGO to leverage its healthy relationship with Apple Inc. (AAPL) to mend the current strife between QCOM and AAPL," KeyBanc analysts John Vinh and Michael McConnell said in a note to clients prior to the deal being announced.
Qualcomm and Apple have been engaged in a legal battle over royalties for several months. Broadcom, however, counts Apple among its biggest customers.
"Additionally, this deal would be meaningfully accretive to AVGO and could drive consolidated EPS of $22.97, which would imply fair value of $350," KeyBanc wrote.
Qualcomm stock surged over 12% by the market close Friday, Nov. 3 amid speculation of a deal. Shares closed at $61.81. In premarket action Monday, Qualcomm shares gained 4% to $64.70. Broadcom stock gained 5.5% to $273.63 by the market close Friday and ticked up 3% Monday morning.
This story has been updated with additional merger details.
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