After a legal fracas with Apple, the chip maker announced that it had put itself up for sale officially and invited interested bidders. In November 2017, Broadcom proposed an offer which the board of directors unanimously turned down. Broadcom reportedly revised their offer to $121b and have planned to have a meeting to discuss the acquisition offer.
Late last year, Broadcom offered to pay $70 per share but this was rejected and it has finally raised its offer to $82 per share including offering to pay $8m as breakup fee, just in case antitrust regulators decide to prevent the deal.
Even though Qualcomm has agreed to have a meeting with the bidder, it still insists that their new offer is still short of the firm’s monetary value and commitments on regulatory issues. Nevertheless, the meeting is set to take place on February 14 to see if both parties can arrive at a consensus and address the issue of “serious deficiencies in value and certainty in its proposal”.
As part of its moves to take over the telecommunications firm, Broadcom has launched a campaign in collaboration with the shareholders of Qualcomm to displace the present board of directors. If things go as planned for Broadcom, and they succeed in taking over the firm, the combined firm will be the third largest chip maker in the world, after Samsung and Intel. Little wonder the desperate measure to displace the present Qualcomm board.
While the Singapore-based firm, Broadcom manufactures chips whose connectivity are used in products such as mobile phones and servers, the American multinational firm, on the other hand, is an equipment company that manufactures and markets wireless telecommunications including broadband delivery. Qualcomm is a business that will eventually benefit from the launch of 5G technology; a business that will continue to thrive as long as technology continues to seek improvement.
Reuters reported that “Broadcom’s antitrust counsel, Daniel Wall of Lathan & Watkins LLP said in a filing with the U.S Securities and Exchange Commission last week that Broadcom was willing to sell two Qualcomm businesses to resolve any antitrust problems”. These include its Wi-Fi networking processors and RF Front End chips for mobile phones.
In response, Qualcomm has a choice to agree to whatever it takes for the deal to be properly sealed. In essence, it would have to state its terms clearly on what is acceptable, and vice versa.
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