Qualcomm meets Broadcom to discuss USD 121 billion acquisition offer

Qualcomm Inc said on Wednesday it met with Broadcom Ltd earlier in the day to discuss the latter's revised $121 billion bid.

Published: 15th February 2018 08:13 AM  |   Last Updated: 15th February 2018 08:13 AM   |  A+A-

A building on the Qualcomm campus is seen in San Diego, California, U.S. (Photo: Reuters)

By Reuters

Qualcomm Inc said on Wednesday it met with Broadcom Ltd earlier in the day to discuss the latter's revised $121 billion bid, the first time the chipmakers have discussed what would be the technology sector's largest ever acquisition.

The outcome of the meeting will determine whether Qualcomm, which has resisted Broadcom's takeover approach since November, will engage in negotiations or continue to defend itself by rallying its shareholders, who are scheduled to vote on March 6 on replacing the majority of its board with Broadcom nominees.

Neither side commented on what transpired in the two-hour meeting. Qualcomm said in its statement its board would meet to determine its next steps.

Broadcom's top executives left the meeting with the impression that their Qualcomm counterparts listened to them but did not engage, according to sources familiar with the matter who asked not to be identified because it was private.

The meeting came after Qualcomm rejected Broadcom's revised cash-and-stock bid of $82 per share last week and said the new offer still undervalued it and fell well short of the firm commitments on regulatory issues it expected.

Qualcomm had said it would take the meeting to allow Broadcom to explain how it would attempt to bridge the gaps in both value and deal certainty and to better understand the issues that remained unaddressed in its proposal.

Qualcomm said last week that Broadcom's plan to address antitrust concerns by selling two Qualcomm businesses, its Wi-Fi networking processors and RF Front End chips for mobile phones, was inadequate to allay concerns that the deal would not win regulatory approval.

The takeover battle is at the heart of a race to consolidate the wireless technology equipment sector, as smartphone makers such as Apple Inc and Samsung Electronics Co Ltd use their market dominance to negotiate down chip prices.

Broadcom is mainly a manufacturer whose connectivity chips are used in products ranging from mobile phones to servers. San Diego-based Qualcomm primarily outsources the manufacturing of its chips which are used for the delivery of broadband and data, a business that would significantly benefit from the rollout of 5G wireless technology.

Qualcomm has argued that signing a deal with Broadcom could create uncertainty with its customers during the time it takes to complete the deal. Broadcom has promised to pay a breakup fee of $8 billion in the event regulators thwart the deal, as well as a "ticking" fee of 6 percent per year on the cash portion of the consideration if the deal takes more than 12 months to close.

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL2018