Qualcomm and Broadcom, the world’s two largest chip markers, have been in talks for a possible merger of their businesses. Legal hurdles have been in the way the two companies continuing talks. Today, however, the companies have made announcements: Broadcom has sent Congress a letter saying that possible hostile takeover is not a threat to US national security, while Jeffrey Henderson was brought on by Qualcomm as an independent board chairman.
Broadcom is in full defense mode in the letter it sent to Congress outlining why its proposed $117 billion takeover of Qualcomm would be a good thing. The Wall Street Journal reports that Broadcom promised not to sell “any critical national security assets to any foreign companies,” which is of course a good thing.
Qualcomm’s news is rather significant because it shows that the company’s board is trying to make an independent decision when talking about the merger. Henderson has been on Qualcomm’s board since 2016, but he’s not tied to the company and can help steer decision making in the right direction that’s in the best interest of both the company and its shareholders.
While both companies are trying to find a way to possible push this merger through, the main problem here is the pricing. Qualcomm’s board believes that Broadcom’s offer of $79 per share is severely undervaluing the company. This area remains uncertain and it remains to be see if there will be any increase to Broadcom’s bid.