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Broadcom takeover bid for Qualcomm stalled by US security committee
There’s been yet another twist in the ongoing saga of Broadcom’s attempt to take over Qualcomm. Last we heard, Qualcomm had set an asking price of $160 billion for the buyout after months of back–and–forth between the two tech giants, but now any possible deal may have completely hit the rocks due to outside interference.
According to a CNBC report, the US Treasury Committee on Foreign Investment (CFIUS) has raised security concerns over what could become the largest pure tech deal in history.
In a letter sent to both Broadcom and Qualcomm lawyers, the CFIUS – a committee made up of representatives from various US government agencies – cited Broadcom’s reputation for research spending cuts and potential national security risks, with the latter concern centered around Broadcom’s business relationships with “foreign entities”.
Qualcomm has pushed a crucial shareholder vote scheduled for March 6 back by 30 days as a result of the national security review.
While the intervention could scupper the deal, Broadcom is apparently still “optimistic” the CFIUS will approve any final deal, according to CNBC’s sources, and the Singapore-based firm said in a statement that it is “fully cooperating” with the review.
The timing of the CFIUS’ move has been highlighted by analysts as another sign that the US government is concerned about the potential dominance of foreign silicon and telecoms companies once the rollout of 5G technology begins.
Perhaps in an effort to avoid a similar political backlash like the one recently faced by Chinese giant Huawei, Broadcom announced plans to move its headquarters to the United States back in November last year – just days before it submitted its first Qualcomm takeover bid.