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[comment] looting and monopoly of heart: Broadcom to hundreds of billions of dollars behind Qualcomm merger

via:CnBeta     time:2017/11/6 20:08:35     readed:102

As we all know, the reason why this rumor is highly concerned, I am afraid the most intuitive is the $100 billion acquisition price, the price broke the ICT industry in 2015 DELL $67 billion acquisition of EMC record. Nevertheless, as long as we from Annwa (the acquisition of the year before the acquisition of LSI Broadcom Corporation), Broadcom, Boko (Brocade) takeover premium reached 41%, 28%, 47%, 10% it is not difficult to discover, even to report before exposure Qualcomm's share price of $55 per share, Bo Tong proposed 70 the dollar purchase price premium is only 27%, far higher than the Annwa's purchase of Broadcom's premium level, that is to say, the $100 billion offer did not reflect the actual value or Qualcomm Broadcom discount. What is the reason?

As we all know, Qualcomm's performance in recent quarters is not very satisfactory due to litigation. In the just released its fourth quarter earnings as an example, due to the impact of Apple patent litigation arrears of royalties, the net profit of only $168 million for the same period last year, net profit of $1 billion 600 million, down 89%, on a quarterly net profit of $900 million, a decline of 81%. As a result, Qualcomm shares have fallen by 16% this year, compared with 41% in the U.S. stock market, the Philadelphia semiconductor index. More critical is that support Qualcomm profit model of patent licensing in recent years in several major markets around the world (such as China, South Korea, Taiwan and the United States China) was the investigation and prosecution of the relevant government departments or companies, which means that the future can continue to bring this model had the biggest profit to the high uncertainty in the increase. In addition, the plan is had to spend $47 billion acquisition of NXP semiconductor company in the EU suffered antitrust review and the acquirer shareholders think the purchase price is too low and the lack of progress, many uncertain factors in the direct effect of high performance at the same time, for the future of Qualcomm (for example, through the acquisition of NXP into the future can the car chip market) also seems to cast a shadow. And has always been good to seize acquisition opportunities of Broadcom apparently saw Qualcomm this embarrassment, the bid in bargaining power can take the initiative, which is the lowest price the greatest harvest value, in the heart of the daylight. However, according to the British Financial Times quoted by most people said, Qualcomm would prefer to continue to develop independently, not willing to be external mergers and acquisitions, which means that Broadcom acquisition may become a hostile takeover. Hostile takeover, also known as hostile takeover, refers to the takeover activity initiated by the acquirer, such as buying in the capital market under the condition that the takeover target's board or shareholder does not agreesharesWait。 At this point, the acquirer and acquired company will launch a "offensive and defensive warfare", snatch control of the company.

So, next, if Broadcom mergers and acquisitions Qualcomm eventually become a fact, what will happen to the industry? For Qualcomm industry should be very familiar with, which is currently the main mobile terminal (such as smart mobile phone) in SoC AP (chip) and baseband (Modem chip) as the leader, Broadcom, although the industry is known as high, but as long as we know it in the mobile terminal of the Wi-Fi chip advantage is enough. How big is the advantage? Apple, Samsung, HUAWEI, millet and many other mainstream mobile phone manufacturers are almost using Broadcom's Wi-Fi chip.

Apple, for exampleIPhone6s/Plus is the use of their own AP Modem Qualcomm Broadcom Wi-FiBCM4359 (in fact, Apple's Wi-Fi chip has been using Broadcom); Samsung S6/Edge is BCM4358, S7/Edge is BCM4359 (in fact, Samsung also has used the basic Broadcom); HUAWEI Mate8 is used in BCM4359 (the Shihua for P series and Mate series is basic B); Broadcom rice millet 5 is used Xiaolong 820 BCM4359 (millet mobile phone / router with Broadcom /MTK). From the above is not difficult to see that, in the mobile phone, especially high-end mobile phone Wi-Fi chip, Broadcom dominant position. But as everyone knows is the fact that the AP and Wi-Fi baseband chip. Whether it is in the intelligent mobile phone industry now, or the future car networking and networking equipment are the core. So if Qualcomm acquisition come true, from the past, Broadcom will have intelligent mobile phone industry is the core and high price. The value of components from AP to baseband to Wi-Fi chip, the ability for either OEM partners or competitors (such as in the baseband chip just to pick up the Intel, MediaTek, Spreadtrum) means that the market's high bargaining power and monopoly power. In view of the current Broadcom and Qualcomm has a large number of standards in their respective the communications industry and non standard patent, once the acquisition is successful, the industry look forward to reduce, or even cancel after Qualcomm (including Broadcom) patent licensing model does not take place, it is possible to more "packing" licensed to OEM manufacturers, then manufacturers pressure will be increasing. From a distance, Broadcom has with the networking in the car networking and Internet core technologies and products of the right to speak. After all their Qualcomm in car networking and Internet of things have gains in the future, the acquisition of NXP, the strength to make the fear, plus Broadcom's Wi-Fi advantage, no wonder the industry in this message out of a feel uneasy

Perhaps it is for this reason, the industry believes that the antitrust investigation of Broadcom merger Qualcomm is likely by the relevant departments and the final abortion, and promote the industry competition and from the point of view of development, we do not hope the acquisition can become a reality. After all, from the past, the "double pass" competition is more attractive, but also more conducive to innovation.

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