Reuters quoted an antitrust-related industry insiders pointed out that the acquisition of the transaction will face the Mainland's anti-monopoly department of the Ministry of Commerce strict examination, which for many reasons, including the acquisition of the transaction is too large, the impact is too large, in addition, Qualcomm before China has already set a precedent for anti-monopoly punishments.
According to the existing regulations, if the merged companies in the previous year's global revenue of more than 1.5 billion US dollars (or 10 billion yuan), or in the Chinese market, the total revenue of more than 2 billion yuan, the companies involved in mergers and acquisitions Must inform China's regulatory authorities, and the acquisition of Broadcom and Qualcomm will satisfy this condition.
Reuters quoted Wendy Yan, a Shanghai-based attorney, as saying that the semiconductor is a key industry for China and Qualcomm had been fined by relevant authorities before the deal was already on the "radar" of the Chinese government regulators.
In 2015, the mainland's National Development and Reform Commission launched an antitrust investigation against Qualcomm. The mainland mobile phone manufacturers criticized Qualcomm for receiving unreasonably high royalties (according to the price of the whole machine), and the NDRC later released nearly 1 billion U.S. dollars to Qualcomm Fines, followed by Qualcomm reduced royalties and signed a patent licensing agreement with almost all Chinese handset makers.
In recent years, with the vigorous development of the semiconductor industry in China and the emergence of some national team companies such as Tsinghua University and Ziguang, their dependence on overseas semiconductor companies such as Qualcomm, Samsung Electronics and Intel has been reduced. Another antitrust lawyer in Shanghai said that the semiconductor industry's influence on China It is strategically important that the Ministry of Commerce will consider the adverse impact that Broadcom acquired Qualcomm on China's semiconductor industry.
The lawyer said that some semiconductor competitors of Qualcomm and Broadcom in China will also raise concerns with regulators and urge the Anti-monopoly Bureau of the Ministry of Commerce to conduct a rigorous audit.The lawyer said the most likely result is that the Ministry of Commerce Will not block the transaction, but will impose some restrictive conditions.Bottom acquisition of Qualcomm acquisition scale, complexity and sensitivity, which means it will need to go through the Commerce Department on M & A approval process of the three procedures, according to the policy needs of 180 day.
Earlier, Broadcom had spent $ 5.5 billion on Brocade Communications Systems Inc. Earlier this year, China's Ministry of Commerce approved Broadcom's acquisition of Brocade but with some restrictions, the Commerce Department conducted a five-month investigation before ratification.