SAN DIEGO, United States-Qualcomm Inc. filed an information statement with the U.S. Securities and Exchange Commission concerning its proposed spinoff of its joint-venture and equity interests in certain international wireless operating companies. The new entity is known as Qualcomm SpinCo Inc., but its name will change before the transaction closes, said Qualcomm.
The U.S. company plans to transfer some of its investments in terrestrial-based telecom operators into a wholly owned subsidiary of Qualcomm, followed by a spinoff of the subsidiary to its stockholders. Qualcomm plans to keep up to 20 percent of the new company’s shares after the spinoff.
The company’s strategy has been to enter into strategic alliances with domestic and international emerging wireless telecom operating companies in order to expand CDMA (Code Division Multiple Access) technology worldwide.
However, these alliances often have required the company to invest substantial equity in the operating company in order to get a commitment from the operating company to purchase cdmaOne equipment from Qualcomm.
Once the distribution is completed, SpinCo will own Qualcomm’s joint venture and equity interests in Pegaso S.A. de C.V., which recently was awarded Personal Communications Services (PCS) licenses comprising a nationwide footprint in Mexico; Metrosvyaz in Russia; Telesystems of Ukraine; ChileSat Telefonia Personal S.A. in Chile; Chase Telecommunications Inc. in the United States; and OzPhone Pty. Ltd., which recently won PCS licenses in Australia.
Qualcomm believes spinning these assets off now will positively impact shareholders and its earnings. The company’s board of directors still must approve the stock distribution.
