Qualcomm has urged shareholders to reject Broadcom's $133 billion takeover bid, arguing that the deal "raises significant regulatory and national security risks".
In a letter sent to shareholders today, ahead of a board election in March, Qualcomm has slammed the 11 executives nominated for election by Broadcom as "lacking significant large-cap technology Board experience" and called for the company's "hostile takeover proposal" to be rejected.
The letter claims that, due to the "complex regulatory challenges" surrounding the deal, Broadcom wouldn't be able to make good on its promise to deliver value to Qualcomm shareholders "for what is likely to be 18 months or more - if ever", adding that Broadcom's claim that it can deliver immediate cash to Qualcomm stockholders is "completely false".
Qualcomm also claims that Broadcom hasn't even taken the necessary steps to start the regulatory approval process in most countries around the world yet, and uses the company's takeover of Brocade as an example of how complicated the process can be.
"This is the largest proposed technology transaction in history and will require thorough reviews from both antitrust regulators and national security groups in multiple countries around the world," Qualcomm barks. "Regulators in many countries may call for conflicting remedies based on their specific concerns.
"The regulatory process will be very long and complicated, and we believe it is highly doubtful that the proposed transaction will ultimately be approved."
The company adds that antitrust regulators would also likely require the sale of overlapping product lines, and "impose restrictions" on the combined company's conduct.
Qualcomm is also keen to point out that "no Qualcomm customers have publicly stated they support Broadcom's bid", adding that it's heard from many major customers that they have "great concerns" about the proposed takeover bid.
"In short, the Broadcom proposal raises significant regulatory and national security risks which will be compounded by the public and private customer opposition," claims Qualcomm.
It concludes: "With these facts in mind, we believe electing Broadcom's nominees makes no sense for Qualcomm stockholders and puts your company at risk of significant value loss in the likely case the deal is not approved."
Obviously, Qualcomm's feelings on its own more modest $38bn bid for rival NXP Semiconductors, which will almost inevitably mean less choice and higher prices, are entirely different. Last week, the proposal received approval from European Union regulators.
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