Qualcomm to pay BlackBerry $814.9 million to settle royalties dispute

(Reuters) - Chipmaker Qualcomm Inc said on Wednesday it was asked to refund Canada’s BlackBerry Ltd $814.9 million in an arbitration over royalties for certain past sales.

FILE PHOTO - A Blackberry smartphone is displayed in this illustrative picture taken in Bordeaux, Southwestern France, August 22, 2016. REUTERS/Regis Duvignau/File Photo

U.S.-listed shares of BlackBerry were up 17.8 percent at $9.07 in heavy trading, while they were also up 17 percent at C$12.03 in Toronto.

Qualcomm’s shares were down about 2 percent at $54.20.

The dispute started in 2016 following Qualcomm’s agreement to cap certain royalties applied to payments made by BlackBerry under a licensing deal.

Qualcomm said on Wednesday it does not agree with the decision of the arbitration panel, but the payment is binding and not appealable.

With BlackBerry planning to invest for growth in its software businesses, the arbitration award will strengthen the company’s balance sheet and increase the likelihood of acquisitions, Canaccord Genuity analyst Michael Walkley wrote in a note.

He increased the price target to $9.50 from $8.

Qualcomm is fighting a lawsuit filed by Apple Inc, which has accused the company of overcharging for chips and refusing to pay some $1 billion in promised rebates.

The U.S. government has accused Qualcomm of resorting to anticompetitive tactics to maintain a monopoly over key semiconductors used in mobile phones.

BlackBerry said on Wednesday a final award, which will include interest and reasonable attorneys’ fees, will be issued after a hearing on May 30.

BlackBerry, which has a market valuation of about C$5.45 billion, reported revenue of C$1.31 billion in 2016, while Qualcomm, which has a market capitalization of $81.75 billion, reported a revenue of $23.5 billion.

Sullivan & Cromwell LLP represented BlackBerry in the proceeding.

Reporting by Ahmed Farhatha in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila