Nov 24, 2017

Broadcom play for Qualcomm would create a new Big Three

Consolidation is the name of the game in semiconductors right now, particularly with Broadcom weighing a hostile takeover bid for Qualcomm.

Why it matters: If Broadcom buys Qualcomm — combined with Qualcomm's pending purchase of Dutch rival NXP — it would expand the chip-making market's Big Two into its Big Three:

Data: Gartner, Jan. 2017; Chart: Andrew Witherspoon / Axios

Qualcomm recently rejected an unsolicited $103 billion takeover offer from Broadcom, but all indications are that Broadcom will go hostile by nominating a slate of Qualcomm board directors by a Dec. 8 deadline. The effort would continue to be backed by longtime Broadcom investor Silver Lake, which has committed up to $5 billion in financing.

  • Private equity angle: Silver Lake does not have any hostile takeover restrictions in its limited partnership agreements, as do some other private equity firms. It did, however, object to The Blackstone Group's consideration of a hostile bid for Dell Inc. several years back, which would have rivaled Silver Lake's own deal for the company in partnership with Michael Dell. As for its rhetorical about-face, the (tenuous) argument here would be that Silver Lake is backing an existing management team (Broadcom) rather than being a purely hostile actor (no, Qualcomm wouldn't see it quite so generously).

Broadcom also last week finalized its purchase of network equipment maker Brocade, while smaller chip-maker Marvell Technology Group said that it would pay $6 billion to buy Cavium.

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Private equity firms fear a Democrat topping Trump in 2020

Illustration: Aïda Amer/Axios

Private equity firms will rush the exits if they believe that a Democrat is likely to defeat President Trump, investors tell me.

The state of play: Each of the four leading Democratic candidates have pledged to eliminate beneficial tax treatment for capital gains among top earners.

Go deeperArrowJan 14, 2020

Arm CEO: SoftBank deal lets us focus less on profit

Photo: CHARLY TRIBALLEAU/AFP via Getty Images

It's rare to hear a CEO talk proudly about bringing profit margins down, but Arm chief Simon Segars says that's just what his company's 2016 acquisition by SoftBank has allowed him to do.

Why it matters: Arm-based chips have found their way into nearly every smartphone. Freed from having to satisfy shareholders with hefty profits, Segars says that under SoftBank, Arm can focus on investing, in hopes of finding similar dominance in the cars and smart devices of the future.

Go deeperArrowJan 8, 2020

Battery safety startup Amionx lands Stanley Black & Decker as first named customer

Photo: Jose Luis Pelaez/Getty Images

Amionx, a startup trying to make batteries safer, has landed its first named customer in tool maker Stanley Black & Decker, which has licensed Amionx's SafeCore technology.

Why it matters: Batteries are increasingly central to all sorts of digital devices, from phones to electric cars — but because by their nature they compress volatile components into tight spaces, they create risks of fire and explosion.

Go deeperArrowDec 19, 2019