Following a six-month strategic review, Qualcomm Inc. (NASDAQ:QCOM), which provides 3G, 4G and next-generation wireless technologies, has decided not to split into separate businesses.
A special committee of the company’s board conducted a deep review of the existing structure, and found that concluded that Qualcomm’s current structure creates unique strategic advantages and will continue to drive substantial stockholder value, according to Thomas Horton, presiding director and chair of the special committee.
Qualcomm is satisfied with its current corporate and financial structure. The review addressed the benefits and challenges of the existing structure, as well as considered a wide range of alternatives for potentially enhancing stockholder value.
In a statement, Qualcomm states that its current structure creates unique strategic benefits for each business, driving enhanced overall financial performance and providing opportunities for the company to build on its roadmap, extend its technology into new categories and sectors and innovate in new technology areas.
“The strategic benefits of the current structure will best fuel Qualcomm’s growth as we move through the upcoming technology transitions and extend our technologies into new user experiences, services and industries,” Qualcomm CEO Steve Mollenkopf stated. “The strategic benefits and synergies of our model are not replicable through alternative structures.
Further, Mollenkopf said that Qualcomm is a good position with the current structure to execute on its strategy to build on a position in the ecosystem and deliver enhanced performance and returns.
“Looking ahead, we have a focused plan in place that we believe will drive growth and we are off to a good start implementing that plan,” Mollenkopf added.
Qualcomm has been under pressure from activist investor Jana Partners and antitrust investigations in Europe. Jana Partners wanted the company to consider a spinoff and other options to enhance shareholder value. The European Commission alleged the company of abusing its market position by offering financial incentives to mobile device makers.
The performance of the company’s does not look impressive, with shares have lost 35.4% of their value year-to-date.