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mega chip deal alarms some chinese smartphone makers

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mega chip deal alarms some chinese smartphone makers

two large chinese smartphone manufacturers said they are against the potential merger of chip giants broadcom ltd. avgo -1.85% and qualcomm inc., qcom 0.36% fearing it could squeeze the mobile companies’ profit margins and benefit large global rivals to their detriment. executives from china’s oppo electronics corp. and vivo electronics corp., which together generate more than 10% of qualcomm’s $22 billion in annual revenue, said they are worried about possible price hikes and other changes that could come down the pipe if broadcom succeeds in its $105 billion hostile takeover bid for san diego, calif.-based qualcomm. a third chinese customer, xiaomi corp., said it also has reservations about a merger, which would create the world’s third-largest chip company. any deal between the chipmakers won’t be decided for months. broadcom, which is currently co-headquartered in san jose, calif. and singapore, in november launched a bid for qualcomm that was rejected by the latter’s board. broadcom has since proposed replacing qualcomm’s board of directors, and the matter will be put to a shareholder vote in march. if a deal is reached, it would have to go through antitrust and regulatory reviews in multiple countries. opposition to a merger from china’s largest smartphone makers could hurt efforts by broadcom to win over chinese regulators. roughly one in three smartphone users in china carry a de...