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Qualcomm Says Two Big Buyers Likely to Bail Over Broadcom Tie-Up

Qualcomm warned investors that two of its most important customers have threatened to take their business elsewhere should Qualcomm be acquired by Broadcom. Qualcomm didn’t name the customers, but said together they contribute a combined $1 billion in chip revenue. Qualcomm’s most important customers are Apple and Samsung, followed by Huawei, LG, Sony, Oppo, and Xiaomi. The customers in question cited a lack of confidence in Broadcom’s ability to lead a combined Qualcomm-Broadcom entity as the impetus for their decisions. Broadcom made a second offer for Qualcomm this week, but Qualcomm’s board rejected it. The two companies will, however, meet over the next few days to discuss the possibilities of a merger. Some of the biggest questions Qualcomm wants answered concern how much more is Broadcom willing to spend on the acquisition, and what will it do to ensure the deal is completed successfully. Qualcomm is also worried about antitrust issues, and pointed to several big deals that have taken more than 18 months to clear regulatory hurdles. Broadcom has offered to pay Qualcomm $8 billion should the merger fail to be approved.

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