Broadcom Grovels To Congress For Qualcomm Takeover Approval Pledging 5G Dominance

A display in the booth of Qualcomm shows the journey early 5G phone chipsets have made out of the lab starting as a suitcase full of outsized prototype components, which has now been shrunk into a smartphone the size of a very thick chocolate bar

Broadcom has the hots for Qualcomm in all the wrong ways, and even with almost $120 billion on the table, the San Diego-based company behind the Snapdragon family of products has pushed away this acquisition. "Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in 5G is completely unfounded".

Broadcom's $117 billion bid for Qualcomm has warped into a complex fight over regulatory approvals, security nerves about China's influence on global mobile networks and the best way forward financially for one of the world's dominant chipmakers. This is because CFIUS says that the acquisition by Singapore-based Broadcom Corp. "When we complete our acquisition of Qualcomm, we expect to have more than 25,000 employees in the USA, working to make Broadcom the leading communication semiconductor company in the world".

Qualcomm's annual shareholder meeting, now slated for April 5, was postponed by 30 days after the Committee on Foreign Investment in the United States (CFIUS) this week ordered a national security review of the takeover.

Qualcomm could not immediately be reached for comment.

CFIUS has the power to block acquisitions on national security grounds. China wants desperately to take the lead in technology from the USA and 5G is only one of several areas they are eager to control.

Broadcom Ltd AVGO.O has promised not to sell critical national security assets to foreign buyers if its deal to buy chipmaker Qualcomm Inc QCOM.O is approved, another effort by the Singapore-based firm to appease USA security concerns.

A weakened Qualcomm could hand over 5G telecommunications prowess to Huawei Technologies and perhaps other Chinese companies, which have been investing heavily to gain a beach head in 5G technology ahead of the transition from 4G networks. The panel said that if Broadcom made a decision to slash Qualcomm's R&D investments it could lead to Chinese competitors like Huawei surpassing the innovation. We are fully committed to making the United States the global leader in 5G by focusing resources and strengthening leadership in this area.

The company also said it would create a $1.5 billion fund to train and educate engineers in the U.S. We are now in the final stages of redomiciling to the United States, and that process will be complete no later than May 6, 2018.

"Hostile takeovers typically destroy the viability of the acquired asset because they are massively disruptive and the acquired employees aren't slaves and will oppose the new management", he said. "Broadcom has an experienced team and would know that, from a financial standpoint, this will be a disaster".

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