Broadcom today announced it has received a new request from the Federal Trade Commission (FTC) for “additional information and documentary material” regarding its proposed bid to acquire Qualcomm. This marks the second request by the FTC during its investigation and one which has led to the suggestion that this acquisition attempt is now facing greater scrutiny than Broadcom might have hoped for, or other similar deals often encounter.
In its defense, however, Broadcom’s statement advises that it had been expecting the second request and that such follow-up actions by the FTC “are common in similar transactions.” The statement also goes on to note how Broadcom considers this a sign that the antitrust review process is moving along. As part of the announcement, Broadcom reiterated its clear intent to acquire Qualcomm and even stated that once an agreement is in place, it expects the acquisition to be fully completed within 12 months. Further adding that its acquisition would not be swayed one way or the other by Qualcomm’s own acquisition of NXP Semiconductors N.V. The FTC has yet to release a statement on this or provide any comments relating to the reasoning behind the second request.
It has become clear over the past few weeks and months how this has now moved firmly into the hostile takeover territory. After Broadcom made its initial interest public, Qualcomm announced it was not interested in a merger with, or acquisition by, the company. Although this was soon followed by Broadcom making a number of nominations to replace existing Qualcomm board members. A move often associated with hostile takeovers due to what will be a gained position of strength when looking to push through an acquisition. More recently, Qualcomm responded by “unanimously” rejecting Broadcom’s nominees and announcing its own board members will once again stand for re-election. This was even more recently followed by Qualcomm publicly making its case to investors as to why Qualcomm will be better off without Broadcom. As for the next step, it is expected stockholders will make their decision on both sets of nominees when they meet in March for Qualcomm's schedule 2018 annual meeting.