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Qualcomm’s pivotal shareholder meeting is bumped up following Broadcom hostile takeover block


After getting delayed by at least a month or so following a regulatory investigation just days before the meeting was scheduled to take place, Qualcomms timetable to hold the meeting is now bumped up to ten days from now — and possibly before Broadcom may complete its move to the U.S. The new change is coming as part of a presidential order by the Trump administration to block a takeover attempt by Broadcom, which is looking to acquire the company in a hostile maneuver worth over $100 billion — making it the largest tech deal of all time. Qualcomm planned to hold the meeting last week, but had to push it back pending an investigation by the Committee on Foreign Investment in the United States (or CFIUS). Qualcomm also said in a statement that the order disqualified the nominees from Broadcom for the shareholder meeting, which would have given it the capacity to acquire Qualcomm in a hostile takeover. Broadcom said it planned to move its headquarters to the U.S., and Bloomberg reported that the company said it would have completed its move by April 3 — again, days before the shareholder meeting was to originally take place. The sum of all these moves — strategic or otherwise — is that, for now, it looks like Qualcomm isnt going to even give Broadcom a shot at getting the directors on board that could help it complete its hostile takeover. Its also a setback for Broadcom CEO Hock Tan, known as an aggressive dealmaker thats looking to lock up the industry in the face of companies like Intel looking to make their moves into the 5G space. Qualcomm Incorporated (NASDAQ: QCOM) today received a Presidential Order to immediately and permanently abandon the proposed takeover of Qualcomm by Broadcom Limited (NASDAQ: AVGO).  Under the terms of the Presidential Order, all of Broadcoms director nominees are also disqualified from standing for election as directors of Qualcomm. Qualcomm was also ordered to reconvene its 2018 Annual Meeting of Stockholders on the earliest possible date, which based on the required 10-day notice period, is March 23, 2018.  Stockholders of record on January 8, 2018 will be entitled to vote at the meeting. In short, the drama continues. See also: A brief history of the epic battle over the fate of Qualcomm.

President Trump halts Broadcom’s bid for Qualcomm, citing “national security”


Last week, Treasury official argued deal would let China dominate 5G development. Had the proposed deal gone through, it would have allowed the Singapore-based Broadcom to purchase the San Diego-based Qualcomm for $117 billion. The hostile takeover also would have been the biggest deal in the history of the tech industry. The order, which did not fully explain on what basis the president made this assessment, suggests that the Trump administration is willing to protect American companies against foreign competitors even more than some had realized. Trump recently ordered that tariffs on imported steel and aluminum be put in place, propping up those American industries. Trump's executive order comes a week after the Department of the Treasurys Committee on Foreign Investment in the United States came to a similar conclusion. In a four-page letter, Aimen N. Mir, Deputy Assistant Secretary for Investment Security, wrote that the national security concerns stem from the fact that: ...a weakening of Qualcomms position would leave an opening for China to expand its influence on the 5G standard-setting process. Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology. For example, Huawei has increased its expenditures and owns about 10 percent of 5G essential patents. While the United States remains dominant in the standards-setting space currently, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover. Broadcom is expected to lessen Qualcomms research and development in favor of short-term profitability — in other words, China cant be given the opportunity to dominate 5G, Mir suggested. Non-Qualcomm SoCs usually require a separate modem, which takes up more space in the already tight smartphone design. In short, non-Qualcomm-powered phones are generally inferior and more expensive to make. On November 2, 2017, Broadcom CEO Hock  Tan appeared with Trump at the White House and promised to "re-domicile" the company in Delaware. (The company, while officially based in Singapore, is currently co-headquartered in San Jose, California.)  "I am American, as are nearly all my direct managers, my board members, and over 90 percent of my shareholders," Tan said. "So today, we are announcing that we are making America home again. Thank you.  Our commitment to re-domicile into the United States is a huge reaffirmation to our shareholders, to the 7,500 employees we have across 24 states in America today, that America is once again the best place to lead a business with a global footprint. Thanks to you, Mr. President, business conditions have steadily improved." However, such a move does not appear to have taken place. Adding to the intrigue, last Friday, the Wall Street Journal reported that Intel is interested in buying Broadcom. In a two-sentence statement issued Monday evening after the executive order, Broadcom wrote: "Broadcom is reviewing the order.  Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns."