For several months now, Broadcom has been attempting to acquire Qualcomm. Initially, Broadcom offered a $130 billion buyout, and then upped the ante to $145 billion last week. On both occasions, Qualcomm declined, so now Broadcom appears to be moving forward with a hostile takeover strategy.
In order to take over Qualcomm, Broadcom will be seeking to gain a majority on the company’s board of directors. Broadcom originally wanted to wipe the slate clean and replace all 11 seats on the board, but this has since been revised, with Broadcom aiming to take over six spots on the board and thus, ensuring majority control. This will be taking place on the 6th of March, during Qualcomm’s annual shareholders meeting.
As Venturebeat reports, by lowering the number of proposed nominees from 11 to six, Broadcom will still be able to gain a majority on the board and push a merger through, but the transition will be less jarring.
In a statement, Broadcom CEO, Hock Tan, stated that “Qualcomm stockholders have consistently communicated to us their support” for the proposed buyout. Broadcom is also confident that shareholders will approve Broadcom’s move to take over six seats on the board, rather than trying to take on all 11. If Broadcom doesn’t get its proposed nominees onto Qualcomm’s board of directors, then the company’s previous $145 billion buyout offer will be withdrawn.
KitGuru Says: It looks like Broadcom may put Qualcomm in a position where it can’t say no to a merger. We’ll have to wait and see how this all plays out in a few weeks time.