Instead, Broadcom has resorted to what is essentially a hostile takeover by putting forward a slate of six Broadcom nominees for Qualcomm's 11-member board. But in light of the heat this week from Washington, Broadcom is now aiming to be complete the move to the USA in April. Now we have a few more details on the matter, with a U.S. advisement panel deeming Broadcom's proposed takeover plans as a potential risk to national security.
The Committee on Foreign Investment in the United States has been reviewing the proposed merger by Broadcom.
"Qualcomm has become well-known to, and trusted by, the USA government", the Treasury Department wrote to lawyers involved in the deal on Monday. The letter caused Qualcomm to delay a critical shareholder vote on the meeting by 30 days.
The firm said it expects 5G to take off faster than 4G, hitting 2.6 billion connections by 2025, more than 20 percent of all mobile subscriptions. Broadcom is now based in Singapore, but has promised to relocate to the U.S. if the deal is approved.
Qualcomm also is a product supplier to the USA government and is working with it on cybersecurity for the next generation of wireless, 5G and the Internet of Things, according to the letter.
Broadcom says it will earmark $1.5bn for funding of 5G wireless broadband networks as part of its proposed acquisition of Qualcomm.
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"Qualcomm's work is too important to our national security to let it fall into the hands of a foreign company - and in a hostile takeover no less", Cotton said in a statement.
Reuters reported last week that CFIUS, overseen by the US Treasury Department, had begun looking at Broadcom's bid as pressure grew from politicians, including senior Republican Senator John Cornyn. "Broadcom's dismissive rhetoric notwithstanding, this is a very serious matter for both Qualcomm and Broadcom", Qualcomm said in a statement.
The combination of Broadcom and Qualcomm would create one of the world's largest semiconductor businesses.
Broadcom is a Singaporean company and Singapore is a longstanding and strong ally of the United States. But the day before, Qualcomm said the vote had to be put on hold; a government committee led by the US Treasury Secretary needed time to investigate a potential merger.
Broadcom first bid $70 a share, or $105 billion, for Qualcomm in November in what would be biggest deal ever in technology, far higher than Dell Inc.'s $67 billion acquisition of EMC Corp.
The deal's pushback on national security grounds is seen by some as trade posturing by the Trump administration against China.