It's not a done deal, however.
Reports claim the merger between Broadcom and Qualcomm would create a company with a market capitalisation of more than $200 billion and would be one of the biggest takeovers in technology sector history.
Any deal between Broadcom and Qualcomm would have to be approved by Antitrust officials, who are still considering Qualcomm's purchase of NXP. Qualcomm will argue that the proposal is an opportunistic move to buy the chipmaker on the cheap, the people said, and it will likely recommend that shareholders reject it. The company has gone so far with its Apple fight that it recently filed a lawsuit seeking to ban sales of the iPhone in China.
"We would not make this offer if we were not confident that our common global customers would embrace the proposed combination", Tan said in a statement.
The deal represents a 28% premium to Qualcomm's share price prior to rumors of the deal which sent the stocks higher last week. In other words, don't expect this deal to close anytime in the near future.
"We believe a Qualcomm acquisition could potentially entail Broadcom retaining the $6 billion - 95 percent licensing cash cow and, depending on the leverage, keep [chips] or sell it to another chip OEM". "It would value Qualcomm's equity at roughly $103bn".
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. There are now 10 buys, 16 holds and no sells on Qualcomm, with an average price target of $61.74, according to data compiled by Bloomberg.