The Singapore-based chip business accused Qualcomm of tipping the wink to the US Committee on Foreign Investment in the United States (CFIUS) to take a closer look at Broadcom's proposed acquisition. Broadcom is also looking to become a USA company registered in business friendly DE, before the stockholder vote. The U.S. Treasury's Committee on Foreign Investment in the United States (CFIUS) sent a letter to two Broadcom lawyers on Monday, outlining some issues it had with the deal. Broadcom then attempted to force a vote to install six new members on the 11-person board, who would effectively do Broadcom's bidding, but the US government intervened.
The letter said that, as with every investigation, the review will look at the potential risk of an unnamed "actor" working through Broadcom to hurt USA national security, adding that the bulk of CFIUS' concerns were classified. Any loss of that competitiveness, the letter said, "would significantly impact USA national security".
In a statement Monday, Broadcom blamed Qualcomm for spurring the intervention - and called the move by CFIUS "a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees". Ordinarily, it only weighs in after a deal is agreed upon - and can recommend that the president block any deal it considers a threat.
"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.
Broadcom has struggled to complete its proposed deal to buy Qualcomm as the latter has resisted, citing several concerns including the price offered and potential antitrust hurdles. Currently, Broadcom is part of Broadcom Limited located in Singapore.
Trump praised the move at the time, calling Broadcom "one of the really great, great companies".
Qualcomm's sale to Singapore-based Broadcom could hurt the chipmaker's competitiveness by reducing research and development, which would threaten USA security, Treasury said in a March 5 letter released by Qualcomm Tuesday.