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Washington Steps In to Referee Broadcom Vs. Qualcomm

Washington Steps In to Referee Broadcom Vs. Qualcomm

A United States national security panel on Sunday ordered Qualcomm to put off its March 6 annual shareholder meeting, delaying a long-awaited showdown in the company's attempt to see off a takeover bid by Broadcom.

American national security bods at the Committee on Foreign Investment in the United States (CFIUS) have asked Qualcomm to delay tomorrow's vote on Broadcom's proposed $117bn (£84.7bn) takeover.

Broadcom meanwhile fired off a letter of its own, urging Qualcomm shareholders to elect all six of its nominees to the board, sending "a clear signal" supporting the takeover bid which would provide a handsome gain to shareholders of the USA firm.

Broadcom is seeking to elect six nominees to Qualcomm's board of directors at the annual meeting, which had been scheduled for Tuesday.

On Monday, Broadcom said that it had been informed Sunday night that Qualcomm had filed a voluntary request for a Cfius review in January. But deals involving foreign companies, especially those of sensitive US technology like semiconductors, have increasingly been in the spotlight.

In what Broadcom calls an "engagement theater", the company claims that Qualcomm did not disclose the request to Broadcom, which was seen as an "intentional lack of disclosure". Qualcomm has so far resisted the unsolicited bid as too low and fraught with regulatory challenges. "This measure will afford CFIUS the ability to investigate fully Broadcom's proposed acquisition of Qualcomm". Qualcomm's leadership fiercely opposes the Broadcom offer, saying it "materially undervalues" the company, and analysts have said for months that even if shareholders approved it, it could be rejected on antitrust grounds. The federal panel is an independent entity, they argued, adding that Broadcom officials shouldn't be surprised given that the company "has been interacting with CFIUS for weeks and made two written submissions to CFIUS".

South Korean political delegation to be received in North Korea
Chung has worked to coordinate American and South Korean approaches toward North Korea. The group will fly into the North this afternoon and stay for two days.

Once Broadcom re-domiciles " now planned for no later than May 6 " the takeover would not be a CFIUS covered transaction, Broadcom said in the statement.

Buying Qualcomm would make Broadcom the third-largest chip maker, behind Intel Corp. and Samsung Electronics Co.

The government committee, which reviews foreign acquisitions of USA assets with an eye toward national-security interests, is led by the Treasury Department and includes officials from the departments of Justice, Defense, Homeland Security and Energy.

CFIUS was apparently split on whether or not to review Broadcom's takeover attempt.

Qualcomm went on to challenge an assertion that wasn't exactly what Broadcom had asserted.

President Donald Trump a year ago blocked a Chinese-backed takeover of Lattice Semiconductor Corp. because of the importance of semiconductors to the US government and China's role in the proposed acquisition.


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