US: CFIUS asks Qualcomm to delay shareholder meeting, vote

Late Sunday night, March 4, the US government asked Qualcomm to delay its annual shareholder meeting by 30 days citing national security concerns, reported The New York Times. The meeting, scheduled for Tuesday, March 6, was supposed to determine whether Singapore-based Broadcom could advance its bid to buy the company.

The surprise move by a government panel that scrutinizes deals by foreign companies comes amid a charged political atmosphere in which scrutiny of takeovers of American companies by international challengers has increased drastically. That the intervention was made even before a deal between the two chip makers was formally reached highlights that shift.

The Committee on Foreign Investment in the United States (CFIUS), a panel of federal agencies headed by the Treasury Department, has the authority to examine foreign investments in American companies to make sure they don’t threaten national security. The committee usually waits until after a deal is done to check it out. But CFIUS has been more active in recent years. And, if it goes through, Broadcom’s bid for Qualcomm could be the largest technology deal in history.

This announcement is the latest salvo in a pitched battle between the two companies. The months since the bid was unveiled have been characterized by sharply worded statements and by Qualcomm’s frigid response to the terms of the takeover attempt.

Broadcom had sought to pave the way for its hostile bid by changing its headquarters to the United States, an announcement that the chief executive, Hock Tan, made alongside President Trump at the White House last year. That reincorporation is due to be completed by early May, and Broadcom has argued that its status as a soon-to-be American company means the deal should not be subject to review. Nonetheless, regulators, who were asked to look at the deal by Qualcomm, pushed for a delay.

Full Content: New York Times

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.