HOW DO THE PIECES FIT TOGETHER?
Is a merger/acquisition eminent?
How do the pieces fit together?
Who will survive the battle?
UPDATE: July 26, 2018 -- QUALCOMM KILLS NXP SEMICONDUCTOR DEAL
Qualcomm apparently has killed the NXP Semiconductors deal for $44 billion due to Chinese regulators missing Qualcomm's self-imposed deadline. While Qualcomm will have to pay NXP a break-up fee of $2 billion, it appears that Qualcomm is planning to spend approximately $30 billion in a stock buy-back that will deliver additional value to Qualcomm shareholders.
UPDATE: March 15, 2018 -- FORMER CHAIRMAN IS ATTEMPTING TO PURCHASE QUALCOMM
According to the Financial Times, "Paul Jacobs, the recently demoted chairman of Qualcomm, has approached several global investors in an effort to acquire the $89bn chipmaker founded by his father, in what would be one of the largest buyout deals in history." Former Qualcomm chairman seeks funding for buyout ($$ Paywall)
UPDATE: March 12, 2018 -- TRUMP KILLS DEAL
It is a moot point as any possible acquisition of Qualcomm by Broadcom was scuttled by President Trump who announced from the White House that there will be no deal.
"There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom)...through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States."
Both companies were ordered to immediately abandon the proposed deal. The order also prohibits all 15 of Broadcom's proposed candidates for Qualcomm's board from standing for election.
UPDATE: March 11, 2018
How to fit another piece in the puzzle?
It appears that computer chipmaker Intel Corporation is worried about the birth of a strong competitor should Broadcom acquire Qualcomm and NXP. Rumors are floating that should Qualcomm fail to hold Broadcom at bay, Intel may consider a hostile takeover of Broadcom to further strengthen its own operations.
Let us not forget that Intel, primarily a CPU maker whose power-hungry, hot-running chips could not be easily used in mobile devices, was late to the mobile game and fiercely competes with Qualcomm. Acquiring Broadcom would be a logical next move for Intel.
In a deal valued over $117 Billion, Singapore-based Broadcom is attempting a hostile takeover of bitter rival San Diego, California-based Qualcomm at a shareholders meeting that would have been held today, March 6, 2017, to ask Qualcomm shareholders to ratify the deal by firing six of the company’s eleven board members and replacing them with Broadcom nominees.
POLITICS TO THE RESCUE ...
The United States Department of the Treasury has responded affirmatively to Qualcomm's secret January 29, 2018, request for an investigation by CFIUS (Committee on Foreign Investment in the U.S.) to determine if the Singapore-based Broadcom represents a national security threat -- and ordered the annual meeting delayed by at least 30 days. The request was not made public and neither the shareholders nor Broadcom was notified of the proceedings.
CIFUS is the same highly-politicized committee that allowed the Russians to purchase 20% of America's uranium production capacity.
On the other side, Broadcom has claimed that this is a last-minute ploy by managers desperate to keep their jobs and denies Qualcomm shareholders the opportunity to unlock additional value in their shares. Broadcom, originally headquartered in the United States, further argues that it should be exempt from CIFUS oversight because it is reincorporating in the United States and that effort should be completed in May 2018 at the end of their second fiscal quarter.
WHEN POISON FAILED
Since Qualcomm attempted to poison any offer by Broadcom by purchasing Netherlands-based chipmaker, NXP Semiconductors, and increasing the debt on the Qualcomm balance sheet by approximately $44 billion, unfortunately the deal became even more attractive to Broadcom who could offer less for Qualcomm to compensate for the overpayment for NXP and to acquire two major competitors at the same time.
APPLE IS LURKING BEHIND THE SCENE
But the picture is murky because of the background machinations of Apple who uses Qualcomm chips and patented technology worth about $2 Billion in annual royalty payments to Qualcomm. The loss of Apple’s business could further devalue Qualcomm and increase its vulnerability.
THE EMPLOYEES ARE AT RISK
However, the real price may be paid by Qualcomm AND NXP employees as Qualcomm has promised shareholders that they will restructure to reduce costs by $1 billion and that means laying off workers to reduce expenses and to compensate for any loss of revenue. And, of course, to resolve any redundancies between Qualcomm and NXP.
If Broadcom should prevail, the same redundant employee headcount reductions are a sure thing.
The problem with mega-mergers is that the Titans crush employees as the executive’s maneuver to keep their jobs.
Are you asking yourself, Am I Next?