Broadcom President and Chief Executive Officer Hock Tan is "astonished" Qualcomm doesn't want to discuss the possibility of merging with the company until Tuesday, as the entrepreneur recently wrote in an open letter addressed to Qualcomm Executive Chairman Dr. Paul E. Jacobs, yet the upcoming meeting is likely to be a difficult one for him, some industry watchers believe. As Bloomberg reported earlier this week, Qualcomm CEO Steve Mollenkopf already informed employees the gathering isn't meant to be indicative of any deal being in the making and the company doesn't feel under pressure to merge or even reach a preliminary agreement to do so until March 6 when its annual shareholder meeting is scheduled to take place.
With Broadcom still being in the process of trying to overthrow Qualcomm's Board of Directors at the March meeting, the San Diego, California-based tech giant continues to treat its suitor as a hostile entity and one that severely undervalues its business, in addition to promising to create what it deems is unrealistic value for stockholders. Qualcomm is still highlighting major regulatory concerns as a potentially insurmountable obstacle to any consolidation taking place and is dismissive of Broadcom's claims that it can wrap up the process of merging the companies within 12 months of agreeing to do so. Qualcomm has been unable to conclude a much smaller acquisition of Dutch NXP Semiconductors for $38 billion since October of 2016 and is still waiting for regulatory approval from China's antitrust watchdog.
Broadcom's blockbuster $105 billion offer for Qualcomm was raised by 24-percent to $121 billion earlier this month, yet the chipmaker swiftly rejected the proposal based on the aforementioned concerns. The firm agreed to meet with Broadcom on Tuesday to hear Mr. Tan explain the bid in more depth and is expected to use that as an opportunity to grill the executive on a number of fronts. Even if Mr. Tan manages to convince his difficult audience to merge with Broadcom, that wouldn't address Qualcomm's insistence that even a $121 billion bid undervalues the company and it's currently unclear whether the entrepreneur would be willing to increase it for the second time, especially given his reputation of a tough negotiator that successfully consolidated more than $380 billion worth of assets over his career, almost exclusively on his own terms. If completed, the tie-up would be by far the largest deal in the history of the tech industry, being almost twice the size of Dell's 2015 purchase of EMC valued at $68 billion.