Jul
11
2018
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Broadcom acquires CA Technologies for $18.9B in cash

Broadcom, the massive semiconductor supplier you may remember from its failed attempt to acquire Qualcomm, today announced that it has reached a definitive agreement with CA Technologies, a major IT management software and solutions provider. The price of the acquisition is $18.9 billion in cash. CA’s shareholders will receive $44.50 per share, a 20 percent premium over the closing price of the company’s stock today.

It’s a bit of a surprise to see chip manufacturer Broadcom acquire a major software and services company. “This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies,” Broadcom CEO and president Hock Tan explains in today’s announcement. “With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions.”

This comment doesn’t exactly explain the rationale behind today’s acquisition, but Broadcom is clearly trying to diversify its offerings. Earlier this year, the company walked away from its proposed hostile takeover of Qualcomm after the Trump administration blocked it. At the time, Broadcom was willing to pay $117 billion for Qualcomm, which would have greatly extended the company’s semiconductor business. Today’s move sees Broadcom enter a completely new business.

The company expects the acquisition to close in the fourth quarter of 2018. It’s unlikely that Broadcom will face any major headwind from Washington this time around.

Mar
16
2018
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Qualcomm’s former exec chair will exit after exploring an acquisition bid

There’s a new twist in the BroadQualm saga this afternoon as Qualcomm has said it won’t renominate Paul Jacobs, the former executive chairman of the company, after he notified the board that he decided to explore the possibility of making a proposal to acquire Qualcomm.

The last time we saw such a huge exploration to acquire a company was circa 2013, when Dell initiated a leveraged buyout to take the company private in a deal worth $24.4 billion. This would be of a dramatically larger scale, and there’s a report by the Financial Times that Jacobs approached Softbank as a potential partner in the buyout. Jacobs is the son of Irwin Jacobs, who founded Qualcomm, and rose to run the company as CEO from 2005 to 2014. Successfully completing a buyout of this scale would, as a result, end up keeping the company that his father founded in 1985 in the family.

“I am glad the board is willing to evaluate such a proposal, consistent with its fiduciary duties to shareholders,” Jacobs said in a statement. “It is unfortunate and disappointing they are attempting to remove me from the board at this time.”

All this comes following Broadcom’s decision to drop its plans to try to complete a hostile takeover of Qualcomm, which would consolidate two of the largest semiconductor companies in the world into a single unit. Qualcomm said the board of directors would instead consist of just 10 members.

“Following the withdrawal of Broadcom’s takeover proposal, Qualcomm is focused on executing its business plan and maximizing value for shareholders as an independent company,” the company said in a statement. “There can be no assurance that Dr. Jacobs can or will make a proposal, but, if he does, the Board will of course evaluate it consistent with its fiduciary duties to shareholders.”

Broadcom dropped its attempts after the Trump administration decided to block the deal altogether. The BroadQualm deal fell into purgatory following an investigation by the Committee on Foreign Investment in the United States, or CFIUS, and then eventually led to the administration putting a stop to the deal — and potentially any of that scale — while Broadcom was still based in Singapore. Broadcom had intended to move to the United States, but the timing was such that Qualcomm would end up avoiding Broadcom’s attempts at a hostile takeover.

BroadQualm has been filled with a number of twists and turns, coming to a chaotic head this week with the end of the deal. Qualcomm removed Jacobs from his role as executive chairman and installed an independent director, and then delayed the shareholder meeting that would give Broadcom an opportunity to pick up the votes to take over control of part of Qualcomm’s board of directors. The administration then handed down its judgment, and Qualcomm pushed up its shareholder meeting as a result to ten days following the decision.

“There are real opportunities to accelerate Qualcomm’s innovation success and strengthen its position in the global marketplace,” Jacobs said in the statement. “These opportunities are challenging as a standalone public company, and there are clear merits to exploring a path to take the company private in order to maximize the company’s long-term performance, deliver superior value to all stockholders, and bolster a critical contributor to American technology.”

It’s not clear if Jacobs would be able to piece together the partnerships necessary to complete a buyout of this scale. But it’s easy to read between the lines of Qualcomm’s statement — which, as always, has to say it will fulfill its fiduciary duty to its shareholders. The former CEO and executive chairman has quietly been a curious figure to this whole process, and it looks like the BroadQualm saga is nowhere near done.

Mar
16
2018
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Equity podcast: Theranos’s reckoning, BroadQualm’s stunning conclusion and Lyft’s platform ambitions

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week Katie Roof and I were joined by Mayfield Fund’s Navin Chaddha, an investor with early connections with Lyft to talk about, well, Lyft — as well as two bombshell news events in the form of an SEC fine for Theranos and Broadcom’s hostile takeover efforts for Qualcomm hitting the brakes. Alex Wilhelm was not present this week but will join us again soon (we assume he was tending to his Slayer shirt collection).

Starting off with Lyft, there was quite a bit of activity for Uber’s biggest competitor in North America. The ride-sharing startup (can we still call it a startup?) said it would be partnering with Magna to “co-develop” an autonomous driving system. Chaddha talks a bit about how Lyft’s ambitions aren’t to be a vertical business like Uber, but serve as a platform for anyone to plug into. We’ve definitely seen this play out before — just look at what happened with Apple (the closed platform) and Android (the open platform). We dive in to see if Lyft’s ambitions are actually going to pan out as planned. Also, it got $200 million out of the deal.

Next up is Theranos, where the SEC investigation finally came to a head with founder Elizabeth Holmes and former president Ramesh “Sunny” Balwani were formally charged by the SEC for fraud. The SEC says the two raised more than $700 million from investors through an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.” You can find the full story by TechCrunch’s Connie Loizos here, and we got a chance to dig into the implications of what it might mean for how investors scope out potential founders going forward. (Hint: Chaddha says they need to be more careful.)

Finally, BroadQualm is over. After months of hand-wringing over whether or not Broadcom would buy — and then commit a hostile takeover — of the U.S. semiconductor giant, the Trump administration blocked the deal. A cascading series of events associated with the CFIUS, a government body, got it to the point where Broadcom’s aggressive dealmaker Hock Tan dropped plans to go after Qualcomm altogether. The largest deal of all time in tech will, indeed, not be happening (for now), and it has potentially pretty big implications for M&A going forward.

That’s all for this week, we’ll catch you guys next week. Happy March Madness, and may fortune favor* your brackets.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocketcast, Downcast and all the casts.

assuming you have Duke losing before the elite 8.

Mar
12
2018
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A brief history of the epic battle over the fate of Qualcomm

The massive fight over the fate of Qualcomm, which chipmaker Broadcom seeks to acquire in the largest deal in technology effort, took another dramatic turn this afternoon when the Trump administration said it would block the deal.

The move is another chapter in a long story, a culmination of a lot of consolidation activity in the semiconductor space and months over jockeying over whether or not Broadcom would be able to complete a hostile bid for the U.S. chipmaker. Following an investigation by the CFIUS, BroadQual is officially on hold.

Let’s review the past few years and see how we got here.

Mar
12
2018
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A brief history of the epic battle over the fate of Qualcomm

 The massive fight over the fate of Qualcomm, which chipmaker Broadcom seeks to acquire in the largest deal in technology effort, took another dramatic turn this afternoon when the Trump administration said it would block the deal. The move is another chapter in a long story, a culmination of a lot of consolidation activity in the semiconductor space and months over jockeying over whether or… Read More

Mar
09
2018
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There’s a shakeup on Qualcomm’s board amid Broadcom’s hostile takeover attempts

Things have not been so rosy for Qualcomm over the past few months, whether you are looking at an ongoing legal dispute between the chipmaker and Apple or Broadcom’s aggressive attempts to acquire the company.

Now, Qualcomm is saying its executive chairman, Dr. Paul E. Jacobs, will no longer serve as executive chairman for the company’s board of directors. He’s going to remain a director, but with all that’s happened related to its dispute with Apple, its attempts to wave off Broadcom, and also its efforts to get through its acquisition of NXP as quickly as possible, it would make sense for at least some move for the chairman to show shareholders that they are aware of the issues and are looking to change things up.

The company said it is discontinuing the role of executive chairman, and also naming a new independent director Jeffrey Henderson who will serve as the non-executive chairman. It’s a lot of weird semantics here, but the end result is that the board is bringing on someone independent as a kind of signal to shareholders that they are ready to make some changes in light of the issues the company has dealt with and Broadcom’s tender offer to buy it.

You might recall some of this happening recently with Uber, where pending the massive investment with Softbank, the company assembled what my colleague referred to as a “Frankenboard.” As Uber CEO Travis Kalanick was on his way out and the company was trying to get fresh funding from Softbank, the board got a lot of new independent directors as it tried to establish some sense appeasement its existing shareholders.

Qualcomm delayed its annual shareholder meeting, which was set to take place Tuesday this week where investors would meet and Broadcom would be making an aggressive stand to work around the company’s existing management in order to acquire it. Throughout the weeks leading up to it, the companies have basically been duking it out of PR statements on their investor relations pages (though this is what we see on the outside), and may now see the need to find some way to appeal directly to the company’s shareholders ahead of the meeting now scheduled to take place in around a month. Qualcomm delayed the meeting pending a regulatory review by the CFIUS, but it still has been part of an ongoing saga.

Mar
09
2018
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There’s a shakeup on Qualcomm’s board amid Broadcom’s hostile takeover attempts

 Things have not been so rosy for Qualcomm over the past few months, whether you are looking at an ongoing legal dispute between the chipmaker and Apple or Broadcom’s aggressive attempts to acquire the company. Now, Qualcomm is saying its executive chairman, Dr. Paul E. Jacobs, will no longer serve as executive chairman for the company’s board of directors. He’s going to remain… Read More

Mar
05
2018
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Qualcomm is pushing back its pivotal shareholder meeting this week amid a regulatory review

 Massive chipmaker Qualcomm, currently targeted by aggressive acquisition attempts by Broadcom, is now delaying a pivotal meeting with shareholders this week that would determine its fate going forward by at least a month to comply with regulators regarding the deal. The CFIUS — the Committee on Foreign Investment in the United States — has requested that Qualcomm delay the… Read More

Feb
26
2018
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Here’s the latest update on the very spicy beef between two massive chipmakers

 Broadcom and Qualcomm, the former of which is trying to acquire the latter, are continuing to duke it out on their respective investor relations pages by issuing public statements to investors over how much drama there is over the pricing of this deal. Read More

Nov
02
2016
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Broadcom acquires Brocade in $5.9 billion deal

Broadcom headquarters Broadcom, Ltd bought Brocade Communications Systems today for $5.9 billion, giving the company a strong offering in networking storage business. It’s quite a nice deal for Brocade shareholders, who gain a 47 percent premium over the $8.69 closing price last Friday night (October 28th). Under the terms of the deal, Broadcom will pay $12.75 per share. It’s an all-cash $5.5… Read More

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