Qualcomm launched a scathing attack on Broadcom’s attempt to take over the company, tearing into its board nominations, highlighting a perceived lack of progress made with regulators and pointing to national security issues in the US.
In a letter to its shareholders, ahead of a board election in March, Qualcomm dismissed the 11 executives nominated for election by Broadcom as lacking significant experience and criticised its suitor for failing to start the approvals process in “most countries”.
It also rubbished claims Qualcomm customers supported a deal and raised doubts final approvals could be achieved within a 12 month timeline detailed in Broadcom’s original bid – if, indeed, the transaction was cleared at all.
In a statement, Qualcomm said Broadcom’s recent comments regarding broad backing for the deal “lack credibility” and noted “no Qualcomm customers have publicly stated they support Broadcom’s bid.”
It added customer opposition would carry significant weight with US antitrust regulators, which have already started reviewing the proposed transaction despite the blockbuster $130 billion bid being turned down.
The lengthy plea also pointed to the protracted 12-month approval process Broadcom completed for its acquisition of Brocade in November 2017. This transaction, it said, was much smaller and less complex, but still proved to be more difficult than Broadcom initially predicted.
The acquisition of Qualcomm will likely need the green light from the US Committee on Foreign Investment in the United States (CIFUS) in addition to other authorities.
Despite Broadcom’s claims this would cause no problems, Qualcomm said CIFUS’ approval “is far from assured,” adding: “Broadcom is a Singapore-domiciled company seeking to effect a hostile takeover of Qualcomm, one of the US’ most critical technology companies.”
“Even if Broadcom re-domiciles in the future, the national security issues raised by Broadcom’s attempt to acquire Qualcomm remain.”
The statement comes a day after Broadcom filed preliminary proxy statements as part of a process to relocate its parent company from Singapore to the US, and follows comments from both companies trying to persuade shareholders on the merits – or otherwise – of the deal.