Qualcomm Continues to Mislead its Own Stockholders
SAN JOSE, Calif., Jan. 23, 2018 /PRNewswire/ -- Broadcom Limited (NASDAQ: AVGO) ("Broadcom") today issued a statement in response to a letter Qualcomm Incorporated (NASDAQ: QCOM) ("Qualcomm") sent to Qualcomm stockholders.
Qualcomm has once again made intentionally vague statements regarding "regulatory challenges" that are simply unfounded, misleading, and a disservice to Qualcomm stockholders. Qualcomm's rhetoric is vague for a reason – because it is not grounded in reality. While it appears that Qualcomm will say anything to remain a standalone company, here are the facts:
- There is no antitrust issue concerning this transaction that could not be satisfactorily resolved during the merger clearance process. It is undeniable that the two businesses are highly complementary, and Broadcom has already identified the potential regulatory requirements for closing the deal, all of which we can satisfy in a timely manner.
- Broadcom has extensive experience in completing complex acquisitions. Throughout Broadcom's acquisition history, which includes nearly $50 billion of transactions, Broadcom has completed the antitrust merger clearance process for each transaction within 12 months, and has not failed to close any signed agreements.
- Broadcom has commenced the regulatory approval process, including having filed for HSR and held initial meetings with certain relevant antitrust authorities, and continues to make progress.
- As we previously announced, we fully anticipated receiving a second request from the FTC as part of the regulatory approval process, and we are already working toward complying with the request.
- We continue to move forward with redomiciling to the U.S. – just yesterday Broadcom filed preliminary proxy materials in connection with a shareholder meeting to approve the redomiciliation. We expect to receive approvals by the end of our fiscal second quarter ending May 6, 2018.
- Broadcom continues to receive clear customer support for the transaction – we would not have announced this transaction without that support.
- We remain confident in our ability to complete a transaction within approximately 12 months following the signing of a definitive agreement.
- Qualcomm's self-inflicted antitrust challenges should not color stockholders' views of Broadcom's ability to close a transaction with Qualcomm.
On November 6, 2017, Broadcom proposed to acquire all of the outstanding shares of Qualcomm for per share consideration of $70.00 in cash and stock, consisting of $60.00 in cash and $10.00 in Broadcom shares. Broadcom's offer represents a 28% premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33% to Qualcomm's unaffected 30-day volume-weighted average price. The Broadcom proposal stands whether Qualcomm's pending acquisition of NXP Semiconductors N.V. ("NXP") is consummated on the currently disclosed terms of $110 per NXP share or is terminated.
On January 5, 2018, Broadcom filed definitive proxy materials in connection with its solicitation of proxies to elect 11 independent, highly qualified nominees to the Qualcomm Board of Directors at Qualcomm's 2018 Annual Meeting of Stockholders, scheduled for March 6, 2018.
Moelis & Company LLC, Citi, Deutsche Bank, J.P. Morgan, BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities are acting as financial advisors to Broadcom. Wachtell, Lipton, Rosen & Katz and Latham & Watkins LLP are acting as legal counsel.
More information regarding Broadcom's proposal for Qualcomm can be found by visiting www.AVGO-QCOM.com.
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