A potential mega-merger between chipmaker Broadcom and U.S. rival Qualcomm is likely to face stern scrutiny in China, antitrust lawyers say, amid a strategic push by Beijing into semiconductors. As David Pollard reports, Broadcom made an unsolicited $103 billion bid for Qualcomm on Monday, aimed at creating a $200-billion-plus behemoth that could reshape the industry at the heart of mobile phone hardware.
The thinking is big, and so is the price. Broadcom's 103 billion dollar bid for Qualcom could create a dominant 200 billion dollar player in the chip market. Just as China is trying to muscle into the market as well. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: The Chinese are probably not going to be very happy with it, because what this move does if it does go ahead, will make them the third largest producer of chips in the world. Expect then, close scrutiny in China. Which earlier this year put restrictions on Dow Chemical's megamerger with DuPont. Qualcomm is already on the regulatory radar there ... In 2015, it paid a record fine of almost a billion dollars for anti-competitive practices. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: I won't be at all surprised if they have some action against this to actually maybe have an anti-trust, anti-monopoly issues to make sure they break it up and maybe have some involvement themselves. Key customers like Samsung may also have concerns. Though if Broadcom were able to salvage Qualcomm's patent dispute with Apple, Apple at least may look at it favourably. As Donald Trump is expected to do - after Broadcom's announcement last week that it's moving all its operations back to America. The deal may well come up as an awkward topic when he visits China this week - with Qualcomm executives in tow. Though they themselves may yet hold out against Broadcom - and a 70 dollar a share bid many of them are believed to see as too small.