The two-way war continued to ferment, and Qualcomm countered the malicious acquisition of Broadcom before the Christmas holiday. Qualcomm announced that it will not appoint any of the 11 director candidates nominated by Broadcom at the annual general meeting held on March 6, 2018, and will vigorously promote the re-election of current board members. The two-way war seems to be a mutual game between Broadcom and Qualcomm, but Apple may become an important factor affecting the deal, because the protracted patent dispute between Apple and Qualcomm may make Qualcomm shareholders feel tired.
Since the beginning of November this year, Broadcom’s acquisition of Qualcomm’s Shuangtong War is now intensifying. After Broadcom’s first $130 billion acquisition of Qualcomm, including debt, was rejected, in early December, Broadcom strongly nominated 11 board candidates in an attempt to replace all members of Qualcomm’s board of directors and took the first step of a hostile takeover of Qualcomm. This time, in the face of the raging Broadcom, Qualcomm once again chose to refuse.
According to Reuters news, on December 22, US local time, Qualcomm rejected 11 directors nominated by Broadcom and private equity firm SilverLakePartners. This is the second time Qualcomm rejected Broadcom’s acquisition, and this is likely to be for the two chips. The fierce dispute between producers has been overwhelmed.
Malicious acquisition of odds?Valuation is one of the main reasons for this Qualcomm refusal.
Qualcomm CEO Steve Morenkov believes that in the semiconductor industry, no company can better target mobile, IoT, automotive, edge computing and networking, and Qualcomm has the ability to create significant additions to shareholders. Value, “because we continue to grow in these attractive segments†and lead the transition to 5G.
Qualcomm said that the board of directors and management attach great importance to creating value for Qualcomm shareholders. “After a comprehensive review with our financial and legal advisors, the Board of Directors concluded that Broadcom’s proposal greatly underestimated Qualcomm and created serious regulatory uncertainty.â€
According to Reuters, Broadcom is considering increasing the possibility of quoting Qualcomm through increased bond financing.
In addition to the possibility of negotiating to raise prices, hostile takeovers are still a much larger possibility.
A hostile takeover is an acquisition by an acquiring company without the permission of the board of directors of the target company, regardless of whether the other party agrees. Both parties used various offensive and defensive strategies to complete the acquisition, and hoped to obtain controlling equity and become a major shareholder.
The specific acquisition method includes directly issuing a transaction offer to the shareholders of the acquired company, and acquiring the common stock of the company at a high price, thereby gradually gaining control of the company in the hands of the minority shareholders.
Judging from the current situation of mutual disagreement, Qualcomm is about to launch a strong defense measure. The exciting attack and defense of these two chip giants is about to begin.
Qualcomm's potential cannot be underestThe market generally believes that Broadcom can make such an acquisition because Qualcomm is relatively backward in the increasing regulatory pressure and technological transformation. Qualcomm, which once stood out in the 3G era, has no advantage in the 4G era. In the 5G era, which has just begun to lay out, Qualcomm will face more intense competition.
In the last quarterly earnings report just released on November 2, Qualcomm's traditional business model was challenged, and patent disputes dragged down its performance. On November 2, Qualcomm released its earnings report for the fourth quarter of September 24. The revenue fell 5% year-on-year to US$5.9 billion; net profit fell 89% year-on-year to US$200 million.
Since the beginning of this year, Apple has filed lawsuits against Qualcomm in the United States, the United Kingdom, and China. Subsequently, Qualcomm also counterclaimed Apple in the United States, Germany, and China.
The dilemma of the operation is reflected in the financial situation, which includes a $25 billion net debt in Broadcom’s offer to Qualcomm.
However, in the rejection of the 13th acquisition proposal, Qualcomm still said that in the semiconductor industry, no company can better target mobile, Internet of Things, automotive, edge computing and networking, and will merge the evolution of 5G.
Although slightly inferior to NVIDIA's continuous release of chip innovation, Qualcomm has in fact been recognized by many industries. In an exclusive interview with 21st Century Business Herald, Tang Rui, the founder and CEO of Automated Innovative Enterprise, said that compared with NVIDIA chips, Qualcomm's chips can still be used in depth on embedded platforms with very low energy consumption. Learning to implement complex scene-aware computing.
"In the future, chips that simply emphasize computing power or have deep learning capabilities are unlikely to become large-scale applications in the automotive industry. But Qualcomm's industrialization advantages accumulated on the mobile phone side, similar to Qualcomm 820A, integrate 5G communication on a single circuit board. Modules, neural network processing engines, GPS, DSRC, wireless WiFi and many other functions are the products that adapt to the future development trend of intelligent connected/automatic driving vehicles."
Qualcomm rejects Broadcom's $100 million takeover offer saying it is undervaluedRecently, it was revealed that Broadcom will acquire Qualcomm for US$130 billion and has been confirmed by Broadcom, but today Qualcomm officially responded: vetoing Broadcom’s acquisition intention.
Qualcomm said that “after discussion by the board of directors, it is believed that Broadcom’s instrumentation is an underestimation of Qualcomm’s advantages in mobile technology and future prospects.†In other words, Qualcomm believes that Broadcom wants to acquire Qualcomm for $130 billion. Measured.
However, Broadcom has previously said that if Qualcomm refuses to acquire, Broadcom plans to make a hostile takeover.
In fact, Qualcomm is not good at present. Although the mobile phone baseband patent fee makes Qualcomm earn a lot of money, but with the continued escalation of disputes between Apple and Qualcomm in patent fees, Qualcomm's profits have been greatly affected.
As of September 24, 2017, Qualcomm's total revenue for the quarter was $5.9 billion, compared with a total revenue of $6.2 billion in the same period last year, down 5% year-on-year; net profit was $200 million, compared with 1.6 billion in the same period of fiscal 2016. The dollar plunged 89%. After Apple, the Android camp also questioned Qualcomm's patent fees, and Qualcomm's patent-affected profit problem will be further expanded.
If Qualcomm's earnings continue to fall after the refusal of Qualcomm's quotation, and the shares continue to fall, then at the Qualcomm shareholders' meeting in March next year, the board of directors is likely to be blamed by shareholders, when Broadcom again offered a quote of 130 billion US dollars. It is very likely that we will get the support of shareholders and eventually acquire Qualcomm.
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