U.S. FTC set to make second request on Broadcom's bid for Qualcomm - sources

By Greg Roumeliotis and Liana B. Baker

(Reuters) - The U.S. Federal Trade Commission is set to make a second request for information on chipmaker Broadcom Ltd's $103 billion hostile bid for Qualcomm Inc , people familiar with the matter said on Friday, indicating heightened antitrust scrutiny.

The FTC review is part of a process under the Hart-Scott-Rodino Act to scrutinize potentially anti-competitive mergers and acquisitions. The vast majority of deals reviewed by the FTC and the Department of Justice are allowed to proceed after the first preliminary review, according to the FTC's website.

However, if a second request is issued, companies must provide more information to the FTC. As part of its defence against Broadcom, Qualcomm has argued that any deal faces a long and protracted antitrust review.

Deals that get a second FTC request for information often do so because of their complexity and size, and a potential acquisition of Qualcomm by Broadcom could still subsequently be approved, some of the sources said.

The sources asked not to be identified because the matter is confidential. Broadcom and Qualcomm declined to comment, while the FTC did not immediately respond to a request for comment.

Broadcom said this week that a separate FTC review of its client relationships is immaterial to its operations, does not relate to its wireless business, and has no impact on its proposal to acquire Qualcomm.

Broadcom has said it is very confident it can complete the Qualcomm deal within 12 months of signing an agreement, while Qualcomm has said that the regulatory review processes required around the world would take much longer.

A deal that Qualcomm has in the works, its proposed $38 billion acquisition of NXP Semiconductors , was approved by EU antitrust regulators this week. Only China has yet to approve this deal, something expected in the next two weeks, according to one of the sources.

The NXP deal still faces an uncertain future because some NXP shareholders, including activist hedge fund Elliott Management, have asked for Qualcomm to raise its offer in order for them to approve the company's sale.

Broadcom has offered to pay $60 per share in cash and $10 per share of its own stock for Qualcomm. To put pressure on Qualcomm to engage in negotiations, Broadcom has put forward 11 board director nominees to replace Qualcomm's board. Qualcomm shareholders are scheduled to vote on these directors in March.

Earlier this week, Qualcomm raised its profit forecast and said it might use funds to buy back stock if its for NXP fails.

(Reporting by Greg Roumeliotis and Liana B. Baker in New York; Editing by Tom Brown)