Broadcom baits hook with promise of $1.5bn investment fund to catch Qualcomm
Telco promises to pump big bucks into 5G if US signs off on merger
Broadcom says it will earmark $1.5bn for funding of 5G wireless broadband networks as part of its proposed acquisition of Qualcomm.
The chip designer said Wednesday that, should its $117bn buyout plan for Qualcomm go through, it will set up a $1.5bn fund to "focus on innovation to train and educate the next generation of engineers in the US."
"Importantly, Broadcom will fund enhanced R&D through lawful business practices rather than predatory and anticompetitive behavior," Broadcom says.
"There is no truth to Qualcomm's argument that its anticompetitive licensing practices are needed to fund a robust R&D effort."
The statement comes as the hostile takeover plan sits in doubt thanks to intervention by the Committee on Foreign Investment in the US (CFIUS) and its investigation into allegations the merger could introduce a national security risk via the combined companies' positions in the CPU and comms equipment markets.
Broadcom notes that it is in the process of moving its official headquarters from Singapore to the US, in part to assuage any worries over national security threats. The move is expected to be completed in May.
Now, with Qualcomm using the CFIUS investigation as reason to push back the shareholder vote on the acquisition until at least April, Broadcom is launching its own charm offensive and pledging to pour money into the US research and education fields with its $1.5bn fund promise.
"Broadcom has a proven track record of managing R&D for maximum impact and investing in core franchises," the statement reads.
"Broadcom will not only maintain the R&D resources Qualcomm devotes to 5G and innovation in future wireless standards – we will also focus R&D spend to those critical technologies that are essential to the US." ®