Even though 2018 has just begun, deal drama is already running high. 

Broadcom Inc. (AVGO) is attempting to replace the board of Qualcomm Inc. (QCOM) in a hostile takeover attempt, while the trial for the Department of Justice's lawsuit blocking AT&T Inc.'s (T) merger with Time Warner Inc. (TWX) will gets under way in the coming months. Meanwhile, Walt Disney Co.'s (DIS) purchase of most of the assets of Twenty-First Century Fox Inc. (FOXA) will face a review in Washington -- though Fox's fan base in the White House may help. 

The Broadcom-Qualcomm saga is the most complex of the lot. 

Broadcom CEO Hock Tan aims to buy Qualcomm for $130 billion, including debt, in what would be the largest tech deal ever. After Qualcomm rejected the bid, Broadcom said it will propose a slate of 11 directors for the mobile chip maker's March 6 annual meeting. 

Tan's buyout offer comes as Qualcomm is attempting to buy NXP Semiconductors Inc. (NXPI) for $47 billion, including debt. Further complicating the already complex deal, activist shareholder Paul Singer's Elliott Management Corp. argues that Qualcomm's bid of $110 per share undervalues NXP. Given that NXP shares closed Tuesday above the offer price at $117.95, investors apparently agree.

There are regulatory issues as well. The European Commission said in November that its review of the NXP deal will stretch into 2018, creating more uncertainty about the transaction.

"I think the Qualcomm-NXP transaction eventually happens, likely at a higher price," Drexel Hamilton LLC analyst Cody Acree said. "Qualcomm, because of the approach of Broadcom, is likely being pressured a bit to make the NXP transaction happen."

Broadcom offered to pay $70 per share for Qualcomm, which gained 1.8% to $65.20 on Tuesday.

Broadcom CEO Hock Tan.
Broadcom CEO Hock Tan.

"I see little reason for the Broadcom transaction to happen anywhere near the price Broadcom is offering," Acree said. Executive Chairman Paul Jacobs, son of Qualcomm co-founder Irwin Jacobs, likely wants to remain independent, the analyst noted. The introduction of 5g wireless networks in the coming years presents an opportunity for Qualcomm to profit, he added. 

About two weeks after the Qualcomm shareholder meeting, the Department of Justice's trial to block AT&T's purchase of Time Warner commences on March 19. Officials at the U.S. District Court in Washington, D.C., expect the court proceeding to last 15 days.

AT&T agreed to buy Time Warner for $85.4 billion, or $108.7 billion including debt, in October 2016. The payout comes to $107.50 per share for Time Warner, which closed up about 0.5% at $91.91 on Tuesday.

The DOJ sued to block the transaction in November, arguing that AT&T could force consumers to pay more for Time Warner's cable channels, among other concerns. The DOJ faces a challenge because it has approved similar vertical mergers, such as Comcast Corp.'s (CMCSA) purchase of a controlling stake in NBCUniversal in 2011.

"DOJ always bears the burden in court," Cowen & Co. analyst Paul Gallant wrote in a report after the DOJ filed suit. "But here we believe it will face a higher-than-normal burden because it needs to explain its departure from (its) longstanding clearance of vertical transactions."

The government could settle as the trial date nears. Gallant noted that the government reached an agreement with merging payments companies First Data Corp. (FDC) and Concord EFC Inc. in 2003 on the morning their trial was to begin. The DOJ cut a deal with American Airlines Group Inc. (AAL) and US Airways Group Inc. in 2013 less than two weeks before the antitrust trial was set to start. 

Barring a settlement, Gallant suggested, the trial and ruling should take five to six months. 

Disney's purchase of most of Twenty-First Century Fox's film and TV studios, cable networks and overseas satellite TV operations is simple by comparison. Disney would pay $66.1 billion, including debt, for the businesses. Fox would retain Fox News, Fox Sports and its TV stations, among other assets.

By leaving out Fox's TV stations and other assets, Barclays Capital analyst Kannan Venkateshwar said, Disney may avoid regulatory issues. The U.S. film industry could present an interesting decision for regulators. "On a pro forma combined basis, this possible transaction would result in Disney/Fox having a (roughly) 33% share of the U.S. box office, though the fragmented nature of the industry makes us relatively unconcerned about regulatory burdens -- but we expect the theatrical exhibitors may make a case for conditions related to film rental rates," Venkateshwar wrote.

However loudly the movie theater operators complain, don't expect Fox and Disney to get the Time Warner treatment. President Donald Trump called Fox patriarch Rupert Murdoch to congratulate him on the deal, the White House confirmed in December. 

"It honestly appears as if President Trump's personal views of CNN (bad) and Fox News (good) are the key drivers behind his administration's antitrust policy," BTIG LLC analyst Richard Greenfield wrote in a report following the deal announcement. Time Warner owns CNN., which Trump has criticized as "fake news." 

The sale of the Fox assets arguably poses a greater threat to consumers, the analyst suggested. "A merger of Disney and Fox will most certainly lead to higher consumer prices, bigger and fatter video bundles, less upstart (streaming video and online cable channel) competition and a meaningful reduction in jobs," Greenfield wrote. "Some of these issues/risk exist in AT&T Time Warner, but they are far less certain."

Editor's note: This article was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.

Jim Cramer and the AAP team hold positions in Broadcom, NXP Semiconductors, Comcast and First Data for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AVGO, NXPI, CMCSA or FDC? Learn more now.

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