Qualcomm says former chairman exploring buyout option after hostile takeover bid blocked

Former Qualcomm CEO Paul Jacobs. (REUTERS)
Updated 17 March 2018
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Qualcomm says former chairman exploring buyout option after hostile takeover bid blocked

SAN FRANCISCO: Qualcomm said on Friday that Paul Jacbos, its chairman until a week ago, was considering a buyout effort for the California chipmaking giant just days after it fended off a hostile bid from Singapore rival Broadcom.
Jacobs, who had been chief executive at Qualcomm for a decade and executive chairman until March 9, will not be renominated to its board at its annual meeting next Friday, the company said.
The board made a decision not to renominate Jacobs “following his notification to the board that he has decided to explore the possibility of making a proposal to acquire Qualcomm.”
As a result, the number of board members will be reduced from 11 to 10 as of the holding of the annual meeting.
The statement said that if Jacobs does make a bid, “the board will of course evaluate it consistent with its fiduciary duties to shareholders.”
The announcement comes after reports that Jacobs has sought to raise capital for a Qualcomm bid, and had approached Japanese tech giant SoftBank, which is in the midst of a major investment spree in the sector.
Jacobs is the son of Qualcomm co-founder Irwin Jacobs and was CEO at the San Diego firm from 2005 to 2014.
Last week, he was replaced as chairman by Jeffrey Henderson, who will be non-executive chairman at Qualcomm, the leading maker of chips for smartphones.
The news comes days after US President Donald Trump blocked a $117 billion hostile bid from Broadcom, citing national security reasons.
US officials had maintained that Broadcom would have curbed innovation at the US chip giant and opened the door to Chinese firms to dominate the process for 5G, or fifth-generation wireless networks.
Qualcomm’s market value is around $90 billion, and is seen as an important player in the 5G race, but it has been hampered by antitrust actions around the world and litigation with Apple over claims that the chipmaker abused its dominance in the sector.
Qualcomm is also in the process of trying to close a takeover of Dutch chip rival NXP.
The board statement said that Qualcomm is now “focused on executing its business plan and maximizing value for shareholders as an independent company.”
It added that Jacobs “has been a valued employee and director of Qualcomm since 1990” and that “he has been one of the great innovators in our industry.”


Global carmakers show off SUVs, electrics as China promises reforms

Updated 11 min 3 sec ago
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Global carmakers show off SUVs, electrics as China promises reforms

BEIJING: Global carmakers touted their latest electric and SUV models in Beijing on Wednesday, as China promises a more level playing field in the world’s largest auto market where domestic vehicles are making major inroads.
Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1,000 models and dozens of concept cars at the Beijing auto show.
Thousands of Chinese auto enthusiasts are expected to wander the halls of the mega exhibition center this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.
Nissan presented its first Made in China electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a drive range of 338 kilometers.
“The new Sylphy Zero Emission is the next step in our electrification strategy for China,” said Jose Munoz, Nissan’s chief performance officer, adding that the company will unveil 20 electrified models over the next five years.
Auto executives may have their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt.
But last week Beijing announced it will liberalize foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump, who has railed against China’s policies in the sector.
China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.
Foreign automakers who account for more than half of vehicle sales in China have cautiously welcomed the changes, with VW saying it has “strong” local partners in their joint ventures.
“This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalization will as well help for fair competition, and having a level playing field,” Jochem Heizmann, CEO of Volkswagen Group China, told reporters.
The show comes as China’s market hits a transition period — the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.
Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.
Ride-sharing is also on the up. On Tuesday Didi — China’s answer to Uber — announced it had joined forces with some 30 partners, including Renault and Volkswagen, to develop vehicles and products specifically tailored for ride-sharing.
Accounting for some 28.9 million car sales last year, the Chinese market could soon match those of the European Union and United States combined.
General Motors sold over four million cars here last year, more than in the US. Volkswagen sold more than three million, roughly six times its home market.
But domestic firms are outselling foreign firms in the SUV segment.
In the electric car market the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future.
At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves — 124 of the 174 electric car models on display are homegrown.
Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.
Volkswagen announced Tuesday investments of €15 billion in electric and autonomous vehicles in China by 2022.
“China is our second home,” recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be “the biggest” worldwide for electric cars.