Broadcom's attempt to take over Qualcomm has been delayed by USA investigation

Broadcom's attempt to take over Qualcomm has been delayed by USA investigation

SAN FRANCISCO With a potential for the biggest-ever deal in the tech sector at stake, Qualcomm shareholders will have their say on a hostile bid for the United States mobile chip giant by Singapore-based rival Broadcom. In any case, Qualcomm says it will postpone its shareholder meeting and election of directors for at least 30 days so that CFIUS can carry out its investigation of Broadcom's offer.

Broadcom's courtship of Qualcomm just got a bit more interesting.

"This can only be seen as an intentional lack of disclosure - both to Broadcom and to its own stockholders", the Singapore-based chipmaker said in a statement.

Broadcom has nominated six alternative candidates to Qualcomm's 11 member board of directors in a hostile takeover bid.

"We can not overstate the likely harm (from a Broadcom hostile takeover) that would result to Qualcomm, the USA company leading the development of 5G and other next-generation technologies, as well as to the United States security interests", said the Gallagher letter.

Singapore-based Broadcom's overtures and wish to acquire Qualcomm, first announced back in 2017, has hit roadblock after roadblock. "It is critical that Qualcomm stockholders know that Qualcomm did not once mention submitting a voluntary notice to CFIUS in any of its interactions with Broadcom to date".

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Broadcom's proposed purchase of Qualcomm is valued at about $117 billion.

Broadcom shareholders will vote on the proposal by May 6, after which it must be confirmed by a judge.

The government committee, which reviews foreign acquisitions of US 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.

Qualcomm, which is trying to convince shareholders it is open to the merger at the right price and terms, said last week it had no intention of delaying the annual shareholder meeting.

Qualcomm officials have rejected Broadcom's acquisition offers, saying that even an increased bid of $121 billion-which was reduced late last month after Qualcomm increased its own offer for chip maker NXP to $44 billion-was too low; that Qualcomm was well-positioned in such growth areas as 5G networking, data centers and artificial intelligence (AI); and that regulatory issues could pose a problem. Qualcomm said it would challenge that fine. Qualcomm has made it clear in the past that it does not want to sell itself to Broadcom, noting that such a deal would be placed under regulatory scrutiny. Scott Peters, D-San Diego, and Duncan Hunter, R-Alpine, had called for a review of the deal, the San Diego Union-Tribune reported. CFIUS still has to rule on the potential acquisition, of course, but Qualcomm is probably hoping that an outcry against the takeover of state-of-the-art technology by a foreign buyer will force Broadcom to go away.

Qualcomm's shares fell 4 percent in trading before the bell.

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