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The federal government yesterday (March 4) appears to have dealt a serious blow to Broadcom’s attempt to take over Qualcomm by ordering the local chip-maker to delay its meeting scheduled for tomorrow (March 6).

Singapore-based Broadcom has bid $117 billion for San Diego–based Qualcomm, which employs 13,000 people locally.

The Committee on Foreign Investment in the United States ordered a 30-day delay in the hostile-takeover vote. The agency “does not typically review mergers before companies have clinched an agreement,” says Reuters. The reason for the requested delay is a general concern about safeguarding Amrica's semiconductor technology over security worries. The semiconductor industry is in a race to develop a faster SG wireless technology, and Qualcomm is one of the major competitors of China, says Reuters.

However, Bloomberg reports this afternoon that Broadcom is on course to win all six of the seats that it is seeking on Qualcomm’s board. This will give it the thrust to push forward with the hostile takeover, even as the Committee on Foreign Investment in the United States is forcing a 30-delay in the meeting at which the vote will take place. “Based on the count of more than half of the votes already cast, Broadcom would have a mandate” to overturn Qualcomm’s opposition to takeover, says Bloomberg.

Here’s my opinion: hostile takeovers almost always result in a bad company. Qualcomm is right to oppose this greed-motivated deal. However, institutional investors generally determine who wins, because all they want is money. They have no concern about what will happen to the combined company, and in this case whether the United States will be a weaker competitor against China in producing faster wireless technology.

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Comments

dwbat March 5, 2018 @ 4:56 p.m.

RE: "...race to develop a faster SG wireless technology" Singapore developed "[email protected]" broadband technology some years back. It was a free WiFi service for all residents. But the main new development worldwide is "5G" technology. I believe they are still working on the standards for the new 5G.

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Don Bauder March 5, 2018 @ 6:46 p.m.

dwbat: On second reading, it appears you are right: it's 5G, not SG. But I had to look at it a long time to determine it was a 5 and not an S. Best, Don Bauder

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dwbat March 5, 2018 @ 6:51 p.m.

I sometimes have trouble typing in passwords, getting just one number or letter wrong, but it initially looks OK to me!

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Don Bauder March 5, 2018 @ 9:53 p.m.

dwbat: Wait until you get to be 82 years old, which I will be in fewer than three months. Your fingers shake, your eyesight is poor....the list goes on and on. Best, Don Bauder

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SportsFan0000 March 6, 2018 @ 5:35 a.m.

This deal should be blocked on National Security grounds...

How much influence do you think China has on Singapore?!

I would guess quite a bit..

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Don Bauder March 6, 2018 @ 7:40 a.m.

SportsFan0000: Absolutely the deal should be blocked on national security grounds or on other grounds. Hostile takeover almost always backfire. The surviving corporation is weak because of excessive debt and inability of employees of both companies to get along.

Companies that grow as a result of hostile takeovers -- or even friendly takeovers -- are poorly managed in almost all cases. Managements are interested in bloating numbers, not in running a company.

The evidence is right in front of us. The only reason such takeovers continue is Wall Street greed. Best, Don Bauder

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dwbat March 6, 2018 @ 8 a.m.

A textbook example of a bad takeover was AOL buying Time Warner. That one stunk on ice.

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Don Bauder March 6, 2018 @ 9:47 a.m.

dwbat: AOL-Time Warner was probably the worst of all time. And it was a friendly takeover. Best, Don Bauder

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dwbat March 6, 2018 @ 6:04 p.m.

Mike Murphy on FB: Not sure about "tek" but they definitely want our tech! ;0(

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MURPHYJUNK March 7, 2018 @ 2:39 p.m.

as long as you understand the message ( what counted in the signal corps back in the day)

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dwbat March 8, 2018 @ 8:33 a.m.

But this is not "back in the day." ;-) Lead typesetting was "back in the day" too, but it also resulted in typos.

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Don Bauder March 14, 2018 @ 9 a.m.

dwbat: Modern technology has not eliminated my typos. Best, Don Bauder

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Don Bauder March 14, 2018 @ 8:59 a.m.

Murphyjunk: That doesn't work in journalism. Best, Don Bauder

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Don Bauder March 6, 2018 @ 8:55 p.m.

dwbat: Yes, they want our tech secrets. This deal would be one way to get them, even though Broadcom has headquarters both in Singapore and Silicon Valley. Best, Don Bauder

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Don Bauder March 6, 2018 @ 8:56 p.m.

Mike Murphy: I am suspicious of that, too. Best, Don Bauder

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SportsFan0000 March 7, 2018 @ 12:01 a.m.

Lot of dough offered...Wondering if "deep pockets" China State companies may be secret investors in this deal....That info is fairly easy to disguise and cover up..

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Don Bauder March 7, 2018 @ 11:12 a.m.

SportsFan0000: Broadcom is a publicly-held company. It wouldn't be so easy to conceal hidden money, but it's possible. Best, Don Bauder

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Visduh March 7, 2018 @ 4:50 p.m.

In regard to this pending buyout/merger (name your poison), on Monday the Wall Street Journal had an editorial entitled "The Qualcomm Question; Why are the feds passing on a review of Broadcomm's takeover bid?" The text of the editorial goes into detail about the conflicts, 5G, classified defense work and other matters. But what's not so usual here is the rather exasperated tone of the editorial.

Isn't it interesting that the Trump administration asked for a hold on further consideration of the deal on Sunday? I'm virtually certain that the feds knew in advance of the intent of the WSJ to print that editorial on Monday, a piece that was written toward the end of the week prior. And that paper does have some influence and is widely read.

While there are doubts about Trump and what he likes and dislikes, there's a good chance that if he weighs in, it will be to scuttle the deal. Keep in mind he isn't big on foreign companies, foreign competition, or some foreigners in general. So, he might do the right thing with this deal, even if he does it for the wrong reason(s).

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dwbat March 8, 2018 @ 8:36 a.m.

Would the US allow a cabal of Russian oligarchs to buy Apple in a hostile takeover? Of course not.

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Don Bauder March 14, 2018 @ 9:08 a.m.

dwbat: True. But look how the U.S. permitted a cabal of Russian oligarchs, under the leadership of Putin, to interfere with our so-called democratic elections. Our security apparatus failed to do much even though it had plenty of warnings. The Obama White House did little even though it had the information before the election. American media failed, too. A major stumbling block to action is that everybody thought Trump would lose. Now look at America. Best, Don Bauder

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Don Bauder March 14, 2018 @ 9:02 a.m.

Visduh: Absolutely. Trump is a nationalist. It was natural for him to nix the takeover. Best, Don Bauder

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