What a Mess!
2.If NXP does not go through: A fine of $2B is in order. If 1B cost saving is 1500 plus layoffs, $2B is 3,000 plus.. Again unprecedented layoffs.
RIP Qcom
China approval of NXP is entirely QCOM's Sr. management's fault. They were banking that the stock market would pull back, and would not have to raise their offer to get majority shares. They drug their feet with the EU hoping that would be the outcome. It did, but they didn't see BRCM making a hostile bid for the company.
The board panicked when they realized they would lose the BoD vote - henceforth the quick price increase. Unfortunately for the company, the US and China are now going at it with potential sanctions. QCOM is cannon fodder in this "Game of Thrones". They gambled, but due to bigger forces, lost. Or as Cersei so eloquently stated "you win, or you die".
CANNOT layoff NXP employees readily due to strong rules in EU against that
Didn't stop them letting all the modem folks go in the UK office during the SRP. They will find a way.
I agree that Broadcom offer is in the order. One they officially move to the Us, they will likely engage in the offer again ( despite restrictions) - that will be with a petition to reconsider. This time it will be a ballpark of $60-$65 per share. Shareholders and employees will be the losers and Broadcom a winner.
There is a tremendous clash of cultures between NXP and QCOM.
CSR was painful and now a couple of years later I'm not at all convinced it did much for us. Seems at this point in the company life cycle Q is just buying stuff because it can. Buy, layoff, buy, layoff.
Equate buying NXP to QCOM pushing the PANIC BUTTON. They CANNOT show growth without an acquisition.
QCOM buying a company is just like a rich kid buying a car. The car the rich kid buys might be an excellent one but the price is not right. What happens when he keeps on buying things like that and doesn't use them properly?
QCOM buys companies with hefty price tag. Look at how they raised the price of NXP just like that during Broadcom brawl.
QCOM failed consistently in integrating the companies. NXP will become a dead weight for QCOM. It's not that NXP is not a good company, it's because of not integrating properly.
Broadcom will come back and will buy QCOM at a much lower price with more layoffs.
NXP enjoys dressing up in blackface:
https://www.flickr.com/photos/promis4you/albums/72157687792535712
https://www.nxpv.nl/nieuwsoverzicht/1616-foto-s-sinterklaas-bij-nexperia-en-nxp-2017
https://www.flickr.com/photos/promis4you/23395965046/in/photostream
The 2bn would be capex expense, so wouldn’t need to be taken out with people directly.
That’s not to say there wouldn’t be an impact, it’s just as extreme as your maths suggest
What else do you expect when a bunch of arrogant /selfish/ corrupt dudes get to the BoD seats ?
Funny when your dad is the co-founder and you get kicked out board. It's crystal clear now, if you don't kiss your VPs arse he has the power to put your name in upcoming layoffs. No matter how smart engineer you are or how many patents you've filled.
Given that Intel is now 3x powerful, it can easily crush this company. It is indeed a sinking ship.
P.S: Good luck to those who survived this round. Please mark yourself safe on Facebook.
Qualcomm is stuck in between rock and wall. It is very unfortunate that last chance to save the company (by Broadcom) was missed. Now it is reaching the end fast.
Well put OP. NXP a blasted mess. Dragged on for >18 months now.
An additional point. Given the geo-politics - hardly Q's fault - the Chinese regulators will be sure to extract a substantial price in terms of concessions in exchange for approval. NXP will be a costly, overly expensive addition burdened with Chinese regulators imposed rules and prohibitions. Further, the whole of NXPs business is so vastly different, the Q management have next to no relevant experience. Integration will be 100 times harder than prior CSR or Atheros efforts and distract greatly from 5G/auto/IoT/server efforts.
Agree with your post. We need to start a campaign #SueTheQ
BoD have misguided shareholders all along and have only serve their egos... the selfishness is blatant and makes me bonkers that they can get away with that.
For now, seems like a good example of 'dis'integrating.
Qualcomm has poor record of integrating. Give me a good example.
Yes, the zeal to get NXP beyond a point was a loosing proposition and mainly to cater the ego. Initial attempts were genuinely to bolster portfolio but any escalations were like entry in a fray of auction and intimidating Broadcom. Not sure, which will lead to least bleeding, but aint looking too pretty.
You've got a point! We already brought CSR few years back. We already have a strong automotive team. Why didn't we just invest in ourselves ?!