Broadcom expects to redomicile to U.S. by April 3

  • Broadcom expects to redomicile to U.S. by April 3

Broadcom expects to redomicile to U.S. by April 3

Intel is watching the takeover battle closely and is eager for Broadcom to fail as the combined company would pose a serious competitive threat, the report said.

Broadcom has a market value of about US$104 billion. Qualcomm, for its part, has largely resisted the effort.

This is why the company itself spent more than 10 billion dollars trying to compete with one of the most important players in this market niche, such as Qualcomm, in addition to other companies, but finally surrendered in the year 2016 without too many successes. Broadcom makes up about 1.3% of Quadrature Capital Ltd's portfolio, making the stock its 9th largest holding.

That deal was, of course, an order of magnitude smaller than the snaffling of Qualcomm.

Acquiring Broadcom would leave Qualcomm on its own, still stuck in a messy dispute with the world's most valuable public company.

Former head of Macintosh products Jean-Louis Gassée speculated that Intel belatedly realised it needed a seat at the smartphone table. The combined revenue of both companies throughout 2017 reached almost $40 billion, climbing ever-higher towards Intel's $63 billion in the same year.

In a letter to Qualcomm and Broadcom explaining the investigation, the US Treasury had raised concerns that if Broadcom chose to reduce long-term investment at Qualcomm in favour of short-term profit it could lead to the US ceding 5G leadership to China. There is real doubt cast on any deal at any price because the USA government is going to scrutinize the deal over potential national security issues due to foreign investment.

Among its concerns are that, by financing the acquisition with some $106bn in debt, Broadcom will be forced to slash R&D spend, namely in 5G technologies.

The fallout has left the deal of buyout open for everyone.

The letter, sent to Qualcomm's attorneys, says Broadcom violated CFIUS' by not providing five-day notice on efforts to relocate in the US on three different occasions.

"Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns", it said in a statement in response to the decision. Broadcom hasn't revealed what exactly the relocation would entail but wants to do so to eradicate national security fears. However, it is not clear what rules Broadcom would have to follow if it goes ahead with announced plans to move its headquarters to the United States.

It said it had petitioned a Singaporean court on Friday to order the convening of a special shareholder meeting to approve the move.

Qualcomm stockholders were to vote last week on whether to elect a slate of Broadcom nominees to Qualcomm's board, which would presumably favor the $117 billion offer from Broadcom that Qualcomm's board has rejected multiple times.

The US government typically weighs in on mergers and acquisitions after a deal is reached.