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Broadcom to meet Qualcomm team on Feb 14 to discuss $121 bn offer

Qualcomm for mobile chips Chipset company Broadcom is expected to meet Qualcomm team to discuss its $121 billion offer on February 14, Reuters reported.

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The US-based semiconductor company on Friday sent warning message to its shareholders saying it could lose two large clients if it accepted chipmaker Broadcom’ revised $121 billion offer. Qualcomm shareholders are expected to meet on March 6 at its annual general meeting in San Diego.

Qualcomm revealed that its two customers who provide more than $1 billion in chip revenue each will move away if the deal went through. These two unidentified customers have shown lack of confidence in Broadcom’s ability to continue to lead in technology.

Last week, Singapore-based Broadcom increased its cash-and-stock offer from $70 to $82 per share, and made concessions, including offering to pay Qualcomm an $8 billion breakup fee should antitrust regulators block the deal.

Qualcomm said on last Thursday that Broadcom’s new offer still undervalues it and falls well short of the firm commitments on regulatory issues it expected. Qualcomm offered to meet Broadcom to see if it can address what it called “serious deficiencies in value and certainty in its proposal.”

Broadcom aims to to replace Qualcomm’s 12-member board at the Qualcomm shareholders meeting next month. Both companies are due to meet proxy advisory firms ISS and Glass Lewis before their Feb. 14 meeting to argue why Qualcomm shareholders should back them in a vote scheduled for March 6.

Later, Broadcom said it was ready to offer two board positions to Qualcomm team. But it is still positioning its board nominees are much better than the nominees of Qualcomm. The US-based semiconductor firm’s board nominees do not have much experience in the global semiconductor market, said Broadcom.

Broadcom is mainly a manufacturer whose connectivity chips are used in products ranging from mobile phones to servers. Qualcomm primarily licenses its technology for the delivery of broadband and data, a business that would significantly benefit from the rollout of 5G wireless technology.

Broadcom’s antitrust counsel, Daniel Wall of Latham & Watkins, said in a filing with the U.S. Securities and Exchange Commission last week that Broadcom was willing to sell two Qualcomm businesses to resolve any antitrust problems. These are its Wi-Fi networking processors and RF Front End chips for mobile phones.

Qualcomm responded on Thursday that unless Broadcom agrees to do whatever is necessary to ensure the deal closes, a commitment to divestitures without restrictions often referred to as “hell or high water”, it would have to be extremely clear and specific about what actions it would refuse to take.

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