Qualcomm Board Rejects List of Directors Nominated by Broadcom
The Qualcomm/Broadcom acquisition saga shows no sign of ending. In the beginning, Broadcom proposed an unsolicited $105 billion acquisition bid of Qualcomm, which was rejected by Qualcomm on account of it “significantly undervaluing the company.”
Reports then stated that the U.S.-based chip vendor wanted Broadcom to increase its bid by $10 per share. In a significant escalation, Broadcom submitted a new slate of board of directors for Qualcomm—the first step in a hostile takeover. Qualcomm called this move an attempt to seize control of its board to advance Broadcom’s acquisition agenda, and stated that the nominees were “inherently conflicted” due to Broadcom’s desire to acquire the company. Moreover, reports also emerged that Microsoft and Google were concerned that this acquisition would stifle innovation.
On Friday, Qualcomm announced via a press release that it has rejected 11 director nominees which were picked by Broadcom and Silver Lake Partners. The company’s board is instead nominating its 11 incumbent directors for re-election at the 2018 annual meeting. This sets the stage for a protracted struggle between the two companies.
The chip maker said that after reviewing Broadcom’s nominees, its governance committee concluded that they are inherently conflicted and would not bring incremental skills or expertise to its board. Previous reports had stated that Silver Lake had helped Broadcom recruit the nominees (the company is an investor in Broadcom). The company added that the current board has a “deep understanding of [….] the semiconductor business and relevant adjacent industries, and has overseen the design and execution of Qualcomm’s strategy.”
Clearly, both companies are in no mood to back down on their demands. Although we’ve said this before, it’s worth repeating that the ultimate fate of this deal could have far-reaching implications which have the potential to affect Android devices. As most Android phones use chips supplied by Qualcomm, any development has the possibility to affect the status of entire smartphone ranges. Multiple industry players are watching to see what happens next, and so are the most important stakeholders: consumers.
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