
Qualcomm rejects Broadcom's $103B takeover proposal - rbanffy
http://www.reuters.com/article/us-qualcomm-m-a-broadcom/qualcomm-rejects-broadcoms-103-billion-takeover-proposal-idUSKBN1DD1NU?feedType=RSS&feedName=topNews&utm_source=twitter&utm_medium=Social
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gourou
> the Board has concluded that Broadcom’s proposal dramatically undervalues
> Qualcomm and comes with significant regulatory uncertainty

Qualcomm's stock took a dive since Apple (25% of their revenue) said they
might not need them for their next models. They're probably gonna wait to
bounce back.

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bradleyjg
Isn't there a big lawsuit between Qualcomm and Apple pending?

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nikcub
There are many lawsuits and trade dispute filings pending from both sides.
Qualcomm is also under anti-competitive practice investigations in a number of
places.

It's going to take years to sort out and will cost a lot - stock has already
tanked 2x what Apple's lost revenue was worth, so the market thinks this is
not only more damaging than currently told, but also that they won't recover

I can't see them surviving years without being taken over

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icebraining
Well, the board rejects it, but the shareholders can still sell, no? Hostile
takeovers have worked in the past, e.g. Oracle's acquisition of PeopleSoft.

~~~
swarnie_
I cant see it happening. Most of the large share holders (largest is 2%) are
index funds and EFT's.

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wbl
I don't really know, but it isn't impossible to do a takeover when index funds
own a lot. If ISS is on the side of the acquirer, the index funds are likely
to go with what they say.

~~~
jdmichal
I'm actually a bit surprised that they don't just abstain, so that their vote
doesn't count. I mean, if you're going to be a passive investor, actually be
passive. Voting in favor of the management or ISS all the time is not passive.

~~~
ensignavenger
I'm just confused at what the International Space Station has to do with it?
(Yes, I DDG'd (duck duck go'ed) ISS, guessing it is some trade association or
society, but I came up with International Space Station, and a very long list
of other possibilities).

~~~
jdmichal
Wikipedia's disambiguation page is typically want you want in scenarios such
as this:

[https://en.wikipedia.org/wiki/ISS_%28disambiguation%29](https://en.wikipedia.org/wiki/ISS_%28disambiguation%29)

Near the bottom of the list, you'll find "Institutional Shareholder Services,
a proxy advisory firm":

[https://en.wikipedia.org/wiki/Institutional_Shareholder_Serv...](https://en.wikipedia.org/wiki/Institutional_Shareholder_Services)

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SaltySolomon
It would have been probably been rejected by anti-trust regulators.

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sabujp
what makes you think so? I mean it should be, but I don't think the govt is
currently being run by a sane administration.

~~~
yeukhon
Are Qualcomm and Broadcom subjected to EU antitrust laws when it comes to
acquisitions? Or just limited to when one side is registered in a EU country?

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wyldfire
Effectively both are in all jurisdictions because they sell their parts
globally. So, the EU certainly would be able to reject the acquisition.

~~~
skinnymuch
What does that mean if the EU rejects it? They are American companies, no? If
the US doesn't reject it, why can't they merge? Or can they, but the EU
rejection means they can't sell things in the EU or other ramifications?

It's curious to me because China does multiple things that wouldn't be allowed
in the EU. Like working far too closely with the government can be allowed for
Chinese companies, but mergers between them can still be rejected by the EU?

~~~
icebraining
The landmark case is the GE-Honeywell merger, which the EU blocked after the
US DoJ had already approved. In it, the Commission said they had the authority
it involved at least two "companies with a combined turnover worldwide in
excess of €5,0 billion and European sales of at least €250 million".

I'm not sure what would be the procedure if they went ahead anyway, but when
you control €500M+ in sales in your jurisdiction, you have a strong position.

~~~
wil421
Great article for anyone interested.[1]Thanks for making me aware of this.

[1][http://content.time.com/time/business/article/0,8599,166732,...](http://content.time.com/time/business/article/0,8599,166732,00.html)

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11thEarlOfMar
Since QCOM hasn't given back the 13% pop the offer provided, it seems
shareholders are expecting BRCM to come back with another, higher offer.

~~~
scurvy
AVGO and yes most expected Qualcomm to reject the offer to solicit superior
ones. This isn't news to anyone, but rather a formality.

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PatientTrades
Bad move by Qualcomm. Now is the best time to cash out. Apple, Samsung and LG
have been working on their own chips, and will have no need to go through
Qualcomm in the next 1-2 years. Seems like ego is getting in the way of the
solid decision making

~~~
andreiw
Qualcomm just released a server chip, broaching a new market for them. And
that chip is a serious pain in the ass for Intel. Why would they want to be
bought by Avago, which itself divested of Broadcom’s Arm server effort earlier
(which recently launched as well anyway!)

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amigoingtodie
How many competitive LTE chipset manufacturers exist?

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skinnymuch
Does anyone know who would be making the chipsets that come after LTE? Do
patents for each round of network technologies change which companies make
them? Or does it stay the same?

Really, I'm wondering what happens whenever 5G or whatever comes after 4G/LTE
comes around. And in how long approximately that will be.

~~~
mschuster91
> Does anyone know who would be making the chipsets that come after LTE?

Even if some competitors will make 5G chipsets, they still will have to build
in everything from good ol' GSM over EDGE over HSxPA to 4G in addition,
because what use is a phone (or IoT gadget!) that only works in major urban
areas where 5G deployments will happen first? All this will have to
incorporate Qualcomm patents at the least, and most likely also Qualcomm
chipsets.

Hell when I drive to the German country side I more often than not only have
EDGE, and the situation in developing countries is even more dire.

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kbart
It would be more surprising if they had accepted.

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m3kw9
Negotiations 101, always reject the first offer?

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TazeTSchnitzel
I want them to merge just so the resulting company can be called BroadQual.

~~~
mindcrime
Nah, they'll probably "rebrand in order to harmonize on multiple vectors of
international brand awareness and leverage strategic synergy among incipient
blue-ocean markets" or some such, and then hire a bunch of high-priced
consultants who will come up with something inspired like:

"Inprise"[1]

[1]:
[https://en.wikipedia.org/wiki/Borland#The_Inprise_years.2C_a...](https://en.wikipedia.org/wiki/Borland#The_Inprise_years.2C_and_name_changes)

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z0d
Qualcomm did the right thing.

Avago Corp. now called Broadcom run by that Monkey man Tan will ruin Qualcomm
into bits and pieces. Just like how Broadcomm was ruined, back then the key
people left & by selling tons of IP slashing $300M off the same fate will
happen to Qcomm, first they will strip off the mega Patents which Qcomm holds
and sell them off to offset this $103Bn. Because that Tan is interested in the
NXP only due to the massive Automotive and IoT treasure
([https://www.eetimes.com/author.asp?section_id=36&doc_id=1332...](https://www.eetimes.com/author.asp?section_id=36&doc_id=1332555&))

Surpisingly this is where Apple comes. Apple's iPhone's chipsets have tons of
Broadcom tech and they share ties with them, Apple may even buy them, Slowly
the Android will die because no other corp apart from Qcomm manages the OSS
SRC development, CAF and XDA development speak for themselves. For the better
or worse, Qcomm is the ONLY leader in the OSS SoC game. Period.

Because Intel doesn't do that and they retired after the Z3000 series powered
ZenFone2 which has great processing at CPU with x86 for Android but poor SGX
GPU from Imagination Technologies & total lack of drivers and documentation
made no OEM to opt for Intel.

Exynos (Samsung's) focus shifted when past Exynos powered SII, SIII was the
last. Now the cat and mouse game happens with their Knox lockdown on the
Note5+ phones.

Mediatek is not even worth considering they are anti-GPL, HiSilicon (Huawei's)
Kirin is in the same page as Exynos, Open Kirin is only a try to grab XDA
attention and budget game. Because once you make the chipset with Neural
Engine which will be under closed doors (NPU in Mate 10, Kirin 970) it won't
be like Tensor Flow at all. Forget the OSS development under it.

Xiaomi doesn't bode well either with their super long 3-6mo wait times for
kernel src drop they don't even stand a chance against the Qcomm's Snapdragon
SoCs and their CAF in both performance or the Open nature. (Read-
[https://www.xda-developers.com/gplv2-and-its-infringement-
by...](https://www.xda-developers.com/gplv2-and-its-infringement-by-xiaomi/))

Also Qcomm is responsible to destroy the SD80x platform off support due to the
CTS check for vulkan driver and lack of Nougat (Android 7.x) Reason ? Because
these Corporates don't want to trust the OEMs, and provide all documentation,
If it leaks their IP is at stake of imitation, security issues. It's a
dangerous game. (Read- [https://www.xda-developers.com/in-depth-capitulation-
of-why-...](https://www.xda-developers.com/in-depth-capitulation-of-why-
msm8974-devices-are-excluded-from-nougat/))

And also Pixel, it's way worse now with removal of Accesibility services
threat (Read - [https://www.xda-developers.com/google-threatening-removal-
ac...](https://www.xda-developers.com/google-threatening-removal-
accessibility-services-play-store/)) &
([http://www.androidpolice.com/2017/11/12/google-will-
remove-p...](http://www.androidpolice.com/2017/11/12/google-will-remove-play-
store-apps-use-accessibility-services-anything-except-helping-disabled-
users/))
([https://www.reddit.com/r/Android/comments/7c4go5/is_google_p...](https://www.reddit.com/r/Android/comments/7c4go5/is_google_play_really_going_to_suspend_all_apps/))

Removal of overlay over other apps (Read - [https://www.xda-
developers.com/android-o-is-breaking-apps-th...](https://www.xda-
developers.com/android-o-is-breaking-apps-that-overlay-on-top-of-the-status-
bar/)) Removal of granular battery stats (Read -
[http://www.androidpolice.com/2017/03/22/android-o-feature-
sp...](http://www.androidpolice.com/2017/03/22/android-o-feature-spotlight-
granular-battery-usage-system-level-items-services-gone/)) their new Pixel's
Visual core is made by Intel (Read - [https://www.xda-developers.com/google-
intel-pixel-visual-cor...](https://www.xda-developers.com/google-intel-pixel-
visual-core-chip/)) and the functions it offers so far on the 8.x DP is just 2
(Read-[https://www.xda-developers.com/developers-cant-test-hdr-
pixe...](https://www.xda-developers.com/developers-cant-test-hdr-pixel-visual-
core-android-8-1/))

So basically Google is now becoming Apple #2, with slamming doors infront of
developers, Headphone jack fiasco, Overpriced trashware iPixels, also they
have a secure Element chip + A/B system making TWRP issues...(Read -
[https://www.xda-developers.com/magisk-v14-4-root-
pixel-2-xl-...](https://www.xda-developers.com/magisk-v14-4-root-pixel-2-xl-
su/))

And coming back Qcomm did every innovation and acquired Patents legally for
more than $25Bn, Most of them include 4G/LTE and 5G R&D having a lead over
Intel/Mediatek by 20Months but they are raising price for that chip or license
deals & as Apple wa earning a lot over the iPhones, Qcom license works per
phone profit basis. So they started this war against Qcomm since they are not
new to kill off the ones who have higher revenue as their producer-customer
relationship like GT Adv tech ( Read - [https://www.reuters.com/article/us-gt-
advanced-tech-bankrupt...](https://www.reuters.com/article/us-gt-advanced-
tech-bankruptcy-apple/gt-advanced-says-fell-victim-to-bait-and-switch-by-
apple-idUSKBN0IR2G220141107)), Imagination Tech (Apple's so called inhouse GPU
is nothing but Imagination's IP after poaching a few of the key people they
decided to drop ball Read - [https://www.anandtech.com/show/11243/apple-
developing-custom...](https://www.anandtech.com/show/11243/apple-developing-
custom-gpu-dropping-imagination/2)) have Intel,which are inferior to the
X16/20 modems at just 600Mbps vs Qcomm's 1.2Gpbps downlink.

Apple vs Qualcomm started long back, dating back to 2007 and WiMax threat to
Qualcomm, (Read this -
[https://www.eetimes.com/document.asp?doc_id=1332242](https://www.eetimes.com/document.asp?doc_id=1332242))
but now Qcomm gets razed due to the Apple's global domination. Plus NXP
antitrust scrutiny. Unless they get that NXP, Apple will continue to blaze
them & Broadcom too.

This is what Apple does to industry, I suspect wearing my Tin Foil hat, They
pressed Broadcom of this deal on Qualcomm, now even Huawei is dropping
royalities for Qualcomm and SKTC asking to renegotiate Qcomm IP licensing it's
a mess, because despite the Qcomm's nature of Patent wars they are the only OE
who support OSS which is most crucial aspect nowadays regarding a smartphone
vs Planned obsolescence.

Ultimately Broadcom is dangerous. NXP deal should move else Qcomm will lose
money due to Apple war and there are ton looming around..& remember vote with
wallet.

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holydude
103BN is more than a GDP of entire countries. This is just mind blowing.

~~~
tonmoy
GDP is a measure of everything produced in a country per _year_. It makes no
sense to compare the value of a company with growth per year.

~~~
6502nerdface
Of course you can compare a rate with a quantity. GP is saying that whole
countries take more than a year to create one (proposed) Qualcomm’s worth of
value.

Have you never compared your car’s gallon-per-mile rate of fuel consumption
with its gas tank’s size in gallons?

~~~
inopinatus
I haven't. The operation I suspect you're thinking of is division, not
comparison. Division of capacity by consumption gives range, whilst a
comparison leaves me scratching my head for a meaningful interpretation. I'm
afraid this analogy appears to reinforce the point rather than challenge it.

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Giorgi
I thought Qualcomm had better revenues?

