U.S. FTC makes second request on Broadcom's bid for Qualcomm
The U.S. Federal Trade Commission has made a second request for information on chipmaker Broadcom Ltd`s
The FTC review is part of a process under the Hart-Scott-Rodino Act to scrutinize potentially anti-competitive mergers. The vast majority of deals reviewed by the FTC and the Department of Justice are allowed to proceed after the first preliminary review, according to the FTC`s website.
However, if a second request is issued, companies must provide more information to the FTC. As part of its defence against Broadcom, Qualcomm has argued that any deal faces a long antitrust review.
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Broadcom said that it had anticipated the second request as a normal part of the regulatory approval process.
"This signifies that Broadcom is moving into the next stage of the U.S. antitrust review process," Broadcom said in a statement.
Deals that get a second FTC request for information often do so because of their complexity and size, and a potential acquisition of Qualcomm by Broadcom could still subsequently be approved, according to sources who asked not to be named because the matter is private.
Reuters reported on the second request earlier on Friday. Qualcomm declined to comment, while the FTC did not respond to a request for comment.
Broadcom said this week that a separate FTC review of its client relationships is immaterial to its operations, does not relate to its wireless business and has no impact on its proposal to acquire Qualcomm.
Broadcom has said it is very confident it can complete the Qualcomm deal within 12 months of signing an agreement, while Qualcomm has said that the regulatory review processes required around the world would take much longer.
A deal that Qualcomm has in the works, its proposed $38 billion acquisition of NXP Semiconductors
The NXP deal still faces an uncertain future because some NXP shareholders have asked for Qualcomm to raise its offer.
Broadcom has offered to pay $60 per share in cash and $10 per share of its own stock for Qualcomm. To put pressure on Qualcomm, Broadcom has put forward 11 board director nominees to replace Qualcomm`s board. Qualcomm shareholders are scheduled to vote on these directors in March.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)