One of the reasons that Qualcomm's board rejected the Broadcom takeover proposal was the high degree of uncertainty about the regulatory release needed to establish the merger. The uncertainty comes from Qualcomm's current NXP (NXP) semiconductor acquisition, which has yet to be released by the EU and mainland regulators, while the former takeover of Brocade Communications Systems is still in the U.S. regulatory unit. Boton recently announced that it had completed a $5.5 billion takeover of the Brocade case, but in view of the company's headquarters in Singapore and the acquisition of US company Brocade by Singapore Inc., the U.S. government's Foreign Investment Review Committee (Basel of Foreign Investment in the United States; CFIUS). In addition, Qualcomm's $47 billion acquisition of the Grace Semiconductor case is under scrutiny by EU regulators. In view of this, the Bo-Qualcomm proposal to buy Qualcomm, fear will make Qualcomm acquisition of the Boon Pu Semiconductor, into a stalemate. As the European Union has already seen Qualcomm's acquisition of the Boon-PU Semiconductor case, fear of violating the principle of fair competition, once to join the BO Qualcomm acquisition Qualcomm This aspect of the consideration, will be the impact of the acquisition of the success of the semiconductor, Qualcomm is not willing to see this development, but Bo Qualcomm claimed that regardless of the grace of the semiconductor successful acquisition or not, still intention to obtain Qualcomm. Another complicating factor is Apple, which is now a key customer for the company, with its key client, Apple, which is suing the world for patent lawsuits. After the merger with Qualcomm, it may not be good for Apple, after all, Apple is now trying to reduce its reliance on Qualcomm by increasing the proportion of Intel's base-frequency data machine chips for the second supplier, and even rumors that Apple's 2018 new iphone will no longer use the high-pass data machine chip, If it is not clear how Apple's attitude has been since the acquisition of Qualcomm, it may not be the Apple's pleasure to improve its bargaining power. At the same time, although the industry believes that the relationship between Bo and Apple has always been better than Qualcomm, but in fact, Bo-Tong has some products and Qualcomm overlap, each has a competitive relationship, Bo Qualcomm and Qualcomm these two companies are in the Wi-Fi chip and Bluetooth technology, such as the leading position, there are several complementary product lines and common customer base. Given that Qualcomm has been accused by Apple of abusing its dominant position in an attempt to over-enrolment high power, it will be subject to scrutiny by regulators and possible opposition from Apple once it becomes a Qualcomm. Since the company was merged in 2016 by Avago, which is headquartered in Singapore, the surviving companies used the AVGO stock market code trading, but the use of Broadcom in the name of the new Bo Tong in the industry shuttle, but the new Bo Tong is still the bones of Singapore company, Or, as a result, its takeover of US company Brocade has been delayed by the U.S. government. However, the recent release of the company's headquarters to move back to the United States, trying to dispel the concerns of the United States regulators, is still unknown whether the law can smoothly let the Brocade takeover case smoothly passed, if still stuck, I am afraid that the future acquisition of Qualcomm proposal will be a heavy danger, after all, Qualcomm is currently considered by the U.S. Trump government as the U.S. semiconductor industry, IC design of the general helmsman, but also to win the Chinese mainland orders for the corner, the White House will be held by Cfius would veto any Trump economic policy of any industrial acquisition case.
NXP and 5G drive future growth rely on the integration of Bo Tong
Broadcom claims to have acquired Qualcomm (QUALCOMM) to help it improve chip business profitability, and further reduce Qualcomm's reliance on authorized business, the company's profit margin is expected to see 62% and the profitability rate of 42% levels, but from the high point of view, Although the smartphone chip business is now slowing, the company believes that the acquisition of NXP (NXP) Semiconductor and 5G technology development in the future of the company will be the opportunity to grow, so it may not be necessary for the merger of the integrated effect. Admittedly, the dispute over licensing lawsuits from Apple (AAPL) and fines from regulators around the world have significantly reduced the profitability of Qualcomm, but at a time of operational challenges, Qualcomm is looking to the next generation of 5G technology, connecting several 1 billion devices connected to the Internet, the era of things networking, Qualcomm is still in the 5G lead, As soon as it is expected to be launched in 2019, Intel, the leading semiconductor leader, is chasing after it. Also such as replication of the successful experience of the 4G era in general, Qualcomm expected in the 5G lead position will again drive the company growth, and this time the market will break through the field of smartphones, access to the Internet and automotive areas. At the same time, in addition to wireless Link technology, Qualcomm focused on the automotive and things networking in the field of the microprocessor market leader, which is Qualcomm's idea of acquiring the world's largest vehicle chip, the purpose of the smart PU Semiconductor. However, although the Qualcomm acquisition of the case has been released by several national regulatory authorities, but is still locked in the EU and the mainland regulatory authorities; At the same time, the purchase price of the grace is also challenged by another level, that is, the en-Moses shareholders have asked Qualcomm to raise the prices of a steady stream of acquisitions. For now, Qualcomm's $110-a-share purchase price, which was set at a premium of 34% per cent before the October 2016 takeover, seemed quite appealing, but over the past 1 years, semiconductor stocks have outperformed the overall stock market, So the company's shares also broke through Qualcomm's acquisition price in August 2017, up to $117, activist investor Elliott Management further increased its shares to 6%, raising the weight of the speech. For this reason, the en-Zhi shareholders have also asked Qualcomm to raise the price of the acquisition, and many analysts believe that Qualcomm may be raising the price of the acquisition to $120 a share, to speed up scrutiny through regulators, which is one of the strategic tools to defend the acquisition. Qualcomm is currently facing the instability of the shareholder sentiment, will have to sacrifice a vigorous and resolute means not, once the successful acquisition of Grace Zhi Pu, not only can inject business growth kinetic energy, can also diversify in other areas of development, this is Qualcomm can't wait to break the dilemma. It is worth mentioning that perhaps Apple is also in the Qualcomm to complete the acquisition of the grace of the semiconductor, select this point of time and Qualcomm to negotiate the authority of the rights of the dispute, after all, if Qualcomm and Grace after the success of the successful, will be in the self-driving, smart phones and things connected to the field, such as the important role Its bargaining power will also be far greater than the present, even if Apple can not take into the high throughput after the fit, also so that Apple selected in the 5G before the launch, Qualcomm-Pu-chi-ji, and burst the friendship with Qualcomm for many years.