USA simplifies Qualcomm decision by complex means

That throws up a major roadblock for Broadcom's $117 billion bid, since shareholders were scheduled to vote on six director nominees proposed by the Singapore-based company, potentially giving it a majority on Qualcomm's board.

The government's national security merger review body, called the Committee on Foreign Investment in the USA, asked Qualcomm to delay its scheduled shareholder elections this week so the committee could continue reviewing the possible merger.

On Monday, Broadcom called the move an effort by Qualcomm to prevent its shareholders to expressing their views on the takeover proposal. Broadcom's claims that the CFIUS inquiry was a surprise to them has no basis in fact.

The postponement of the vote, ordered by CFIUS, set off an another angry exchange between the two companies, which have held just two meetings in over four months and have made no progress in negotiations toward a deal.

Cotton said in a statement that Qualcomm's work is "too important" to allow a hostile takeover by a foreign company. It characterized Broadcom's release as "a continuation of its now familiar pattern of deliberately seeking to mislead shareholders and the general public".

Broadcom, based in Singapore, has pledged to move its headquarters to the US, which it believes would remove CFIUS jurisdiction. Since Qualcomm's board of directors have rejected Broadcom's overtures, a direct appeal to shareholders is the company's last chance to see through the merger.

Broadcom is pursuing a hostile takeover of Qualcomm, which would be the largest technology deal in history, creating a giant chip maker whose products would be in the majority of the world's smartphones. National security is also the reason the president gave last week for imposing tariffs on imported steel and aluminum.


U.S. Sen. John Cornyn, a Texas Republican, as well as San Diego-area Congressmen Scott Peters, a Democrat, and Duncan Hunter, a Republican, sent letters to Trump Administration officials requesting a CFIUS review.

The two companies are locked in a battle over the future of Qualcomm, whose board and management say Broadcom's offer is a gambit to steal the company on the cheap.

In a February 26 letter to Treasury Secretary Steve Mnuchin, Rep. John Cornyn, R-Texas, the second-ranking Republican in the House of Representatives, asked Mnuchin to have CFIUS get involved given not only that a China-based company was trying to buy an American entity, but that it was doing so through a hostile takeover.

The company added that the US Securities and Exchange Commission (SEC) has cleared Broadcom's preliminary proxy statement, and as Broadcom has pledged to redomicile to the US - and its board is made up of individuals which are nearly all American - CFIUS does not have to be involved in this transactions.

Qualcomm still is awaiting approval from regulators in China to acquire NXP.

Broadcom has argued that CFIUS' concern is unwarranted since it does not control the directors that it proposed.


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