Qualcomm's chips and patents affect nearly every smartphone model in the world, and Broadcom is offering $70 a share, which is a 28pc premium on Qualcomm's closing stock price last Thursday (2 November) according to a report in The New York Times.
Broadcom president and CEO Hock Tan said the bid was "compelling for stockholders and stakeholders in both companies".
But the San Diego-based company is expected to try and persuade shareholders to reject the deal by arguing it has been undervalued by the unsolicited offer.
Buying Qualcomm would make Broadcom the third-largest chipmaker, behind Intel Corp. and Samsung Electronics Co.
Broadcom is offering a combination cash-and-stock deal of $70 per share.
Broadcom is up 2.31% to $279.95 and Qualcomm is up 4.57% to $64.63. The proposed transaction is valued at approximately $130 billion on a pro forma basis, including $25 billion of net debt, giving effect to Qualcomm's pending acquisition of NXP on its now disclosed terms. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination", said Tan in a press statement.
"With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value". Broadcom primarily focusses on Wi-Fi and Bluetooth chips.
The deal stands regardless of the results of Qualcomm's $110 per share bid for NXP Semiconductors, Broadcom said in a news release.
Broadcom plans to move its headquarters exclusively to the United States, which would allow it to avoid review by the Committee on Foreign Investment in the United States, which reviews foreign ownership of U.S. assets.
Broadcom's own $5.5 billion (£4.2 billion) agreement to merge with US network provider Brocade Communications Systems past year has been delayed while it is scrutinised by the US Committee on Foreign Investment (CFI), which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds.