The government action on Sunday highlighted growing USA concerns about safeguarding semiconductor technology and cast a doubt on the deal's success. The Committee on Foreign Investment in the United States (CFIUS) directed Qualcomm to postpone the meeting for 30 days.
Broadcom is incorporated and now based in Singapore, but CEO Hock Tan announced late previous year while visiting President Donald Trump at the White House that the company would return its corporate headquarters to the USA, likely using San Jose as a base.
"Upon completion of the redomiciliation, Broadcom's proposed acquisition of Qualcomm will not be a CFIUS covered transaction", they wrote, adding that Broadcom's board of directors and senior management team comprise mostly American citizens. Broadcom's wireless smartphone chip technology is used in Apple and Android mobile devices and in set-top boxes, data storage devices, ...
The ugly rhetorical war between semiconductor companies Broadcom and Qualcomm got even uglier on Monday.
Huawei is forging closer commercial ties with big telecommunication operators across Asia, the Americas and Europe, putting the company in prime position to lead the global race for wireless 5G networks, despite USA allegations it poses a security threat. "They would just have to buy Huawei (equipment)".
Gallagher also said a disruption of Qualcomm's research and development efforts "would in effect hand the growing competition for 5G to China".
Still, while the government may not approve of the takeover, a CFIUS review does not necessarily mean the deal will be halted.
The involvement of CFIUS marks a major blow to the deal. To keep the deal alive, Qualcomm announced today that it extended its offer until March 9 at 5 p.m. ET.
Toronto police to update investigation of accused serial killer
On Monday, Idsinga confirmed that another set of unidentified remains have also been found in a planter on the Leaside property. According to The Canadian Press , Toronto police have recovered a seventh set of remains linked to the alleged serial killer.
Shareholders were due to meet on Tuesday to vote on proposals to kick out the majority of Qualcomm's directors and appoint those nominated by Broadcom, paving the way for the new board to recommend the sale.
"This shows how indirect exposure to China is a frequent, but under-noticed, source of perceived national security risk", said Mario Mancuso, a former CFIUS member who is now a partner at law firm Kirkland & Ellis LLP. But it now appears willing to continue to pursue its bid for Qualcomm through the foreign-investment committee review, said Bernstein research analyst Stacy Rasgon in a research note.
Singapore-based Broadcom has bid $117 billion for San Diego-based Qualcomm, which employs 13,000 people locally.
Trump praised the move at the time, calling Broadcom "one of the really great, great companies".
U.S. Senator Tom Cotton said on Monday he backed a U.S. government panel's decision to delay a Qualcomm Inc shareholder meeting to allow for a more extensive review of Broadcom Ltd's takeover bid. In the case of Qualcomm, the panel, which includes representatives from multiple government agencies, is looking at the acquisition before it is complete.
Qualcomm's decision to delay the meeting until April 5 came in response to an order from a US government committee that is reviewing the proposed takeover.
Qualcomm said it would comply with the order and delay its shareholder meeting at least 30 days.
The deal was expected to face tough scrutiny from competition regulators.