Published in News

Broadcom faces antitrust investigation

by on18 January 2018

Qualcomm takeover just became more complicated

The Federal Trade Commission (FTC) is investigating whether chipmaker Broadcom engaged in anticompetitive tactics in negotiations with customers, in an antitrust investigation which could make any merger with Qualcomm a little more difficult.

For those who came in late, Broadcom wants to take over Qualcomm in a $103 billion deal. Since the FTC would likely review any merger for anticompetitive practices, the current probe could make regulatory approval more challenging.

Broadcom has recently received subpoenas that seek an extensive amount of information, according to the Wall Street Journal, which was the first to report the probe on Wednesday.

The focus of the concern has been that Broadcom has changed some contracts to require customers to buy a percentage of its production of items rather than a specific number, the paper reported.

Broadcom insists that the  FTC review is immaterial to our business, does not relate to wireless and has no impact on its proposal to acquire Qualcomm, Broadcom said in a statement.

But it does mean that even if Broadcom convinces Qualcomm's shareholders to ignore their board, and go for the hostile takeover, it might find the deal scuppered by regulators.  Qualcomm itself has been in some antitrust hot water, so merging with another outfit which is facing similar accusations might be doubling the antitrust hurt.  



Last modified on 18 January 2018
Rate this item
(0 votes)

Read more about: