Qualcomm on Thursday publicly highlighted an opinion article published by the Competition Policy International wherein numerous antitrust experts and former competition officials from around the world are arguing against Broadcom's bid to acquire the chipmaker. The consensus among the authors is that any consolidation attempt would be met with significant regulatory opposition and require massive concessions and divestitures, many of which would significantly affect the value of the move itself. Even if the duo would be successful in its attempts to convince the world's antitrust watchdogs to greenlight the merger, doing so would likely take over 18 months, the authors argue, pointing to Qualcomm's own acquisition of NXP Semiconductors as a recent example of competition concerns slowing M&A developments to a crawl. Despite proposing a deal that's valued at approximately a third of Broadcom's own bid and not directly competing with the Dutch firm, Qualcomm still hasn't managed to conclude the proposed takeover after 15 months.
A Qualcomm-Broadcom merger would likely be subjected to even more intense scrutiny by virtue of the fact the two companies are directly competing in a number of segments such as RFEE and Wi-Fi products, the authors argue. Besides divestitures, the combined entity would likely be harshly restricted in regards to its licensing and distribution options, according to the opinion touted by Qualcomm. Broadcom's proposed limitations on Qualcomm's licensing business during the merger period also violate "gun-jumping" rules in certain countries and would likely elicit an investigation by the Federal Trade Commission in the United States, according to the article. Qualcomm previously said Broadcom wanted to fully control its valuable licensing unit during the consolidation period.
Broadcom yesterday lowered its unsolicited offer by $4 billion to $117 billion, reducing it by the amount of cash Qualcomm added to its NXP bid on Tuesday. The Singapore-based technology giant is still staging a coup of Qualcomm's board and is trying to convince shareholders to replace the majority of the chipmaker's directors with its own candidates willing to vote for a sale. The crucial votes will be cast at Qualcomm's annual shareholder meeting scheduled to take place on March 6, with most industry watchers still being reluctant to predict the outcome of the election.