Broadcom's takeover of Qualcomm now claimed to be a national security risk

Broadcom's Qualcomm bid gets a kick in the groin from the US government

Instead, Broadcom has resorted to what is essentially a hostile takeover by putting forward a slate of six Broadcom nominees for Qualcomm's 11-member board.

The US Committee of Foreign Investment in the United States has written a public letter stating that, having had a bit of time to mull the matter over, it has concluded the whole thing looks far too dodgy by half and warrants a much closer look.

Qualcomm said in a statement late on March 5 that it was delaying its 2018 annual meeting to April 5 as a result of the CFIUS order.

Qualcomm on Monday postponed a shareholder vote on Broadcom's nominees for Qualcomm's board after the committee on foreign investment in the USA, which treasury leads, ordered a delay to review the deal. According to Guillermo Christensen, a partner at the law firm Brown Rudnick and a specialist in CFIUS-related transactions, it is unusual for the CFIUS to get involved in a transaction that has yet to be agreed to by both parties.

"Having a well-known and trusted company hold the dominant role that Qualcomm does in the USA telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security".

"A shift to Chinese dominance in 5G would have substantial negative security consequences for the United States", the letter said.

The deal's pushback on national security grounds is seen by some as trade posturing by the Trump administration against China. Broadcom is also looking to become a USA company registered in business friendly DE, before the stockholder vote. Broadcom is based in Singapore.

There are other reasons at play here, including the amount of money Qualcomm invests into research and development.

A source said if the deal was completed, the USA military was concerned that within 10 years, "there would essentially be a dominant player in all of these technologies and that is essentially Huawei, and then the American carriers would have no choice". Broadcom said there is no truth to Qualcomm's argument that its anticompetitive licensing practices are needed to fund a robust R&D effort.

Broadcom did not immediately return The Daily Caller News Foundation's request for comment.

Assuming its aim was to scupper Broadcom's hostile takeover, the Qualcomm board seems to have played a blinder in getting the CFIUS involved.

Today, Qualcomm stockholders were supposed to vote on the make up of the company's Board of Directors.

Related news:

Hot News

isis-killer-beheading-video-story-top Google Lens comes to all Android Phones with Google Photos
Mar 07, 2018 - 11:57
More features will be added in the future and Google will continue to work on improving Lens recognition for animals and plants. Google announced that Lens will be available for more Android smartphones, as long as they have Google Photos installed.

isis-killer-beheading-video-story-top Rajya Sabha election will test Opposition unity in Uttar Pradesh
Mar 07, 2018 - 11:57
The other vacancy was caused by Bahujan Samaj Party chief Mayawati's resignation from the Rajya Sabha in July a year ago . Voting for three Rajya Sabha seats from Odisha on March 23.

isis-killer-beheading-video-story-top France warns of sanctions - Iran denies link to Bahrain cell
Mar 07, 2018 - 11:56
He added that Iran's missiles "are defensive and are not created to carry weapons of mass destruction, since we don't have any". Tehran denies seeking nuclear arms and says its missiles are purely defensive and not up for discussion.

isis-killer-beheading-video-story-top Australia wrap up First Test in 22 balls
Mar 07, 2018 - 11:55
Batsman Aiden Makaram scored faboulas Hundred and guided South Africa to score 298 in the second innings. Four Australian batsmen completed their half centuries with Mitchell Marsh missing his ton by four runs.

isis-killer-beheading-video-story-top France to present first statutory rape law
Mar 07, 2018 - 11:55
The uproar over two recent cases of men accused of having sex with 11-year-old girls has led to this changes being considered. President Emmanuel Macron met his future wife, Brigitte, when he was around 14 and she was 38 and a teacher at his school.

isis-killer-beheading-video-story-top Walmart expanding meal kits nationwide
Mar 07, 2018 - 11:55
These meal kit programs often require subscriptions, since frequent purchases are needed to manage their business model. It is yet to be seen if Walmart Inc. can pull off the results it has been aiming after with this latest launch.

isis-killer-beheading-video-story-top Houston Texans Won't Sign Players Who Kneel During National Anthem
Mar 07, 2018 - 11:54
The Texans did not immediately respond to a request from The Washington Post for comment . It's one thing for the Texans not being interested in players who protested.

isis-killer-beheading-video-story-top Porsche Mission E Cross Turismo created to leave Tesla in the dust
Mar 07, 2018 - 11:52
Porsche CEO Oliver Blume described the model as a vehicle to "fuse Mission E design with Panamera Sport Turismo off-road touches". Late last month Porsche dished out new details on the Mission E Electric performance sedan that aims to challenge Tesla .

isis-killer-beheading-video-story-top US aircraft carrier visits Vietnam
Mar 07, 2018 - 11:49
Vietnam, China, Indonesia, the Philippines, Brunei, Thailand and Singapore have disputes in the area. If China crosses Vietnam's red line, Vietnam must defend its position.

isis-killer-beheading-video-story-top Woman Picking Up Trash Finds Oldest Known Message In A Bottle
Mar 07, 2018 - 11:47
The message is dated June 12, 1886, and it was thrown overboard form the German sailing vessel Paula , 950km from the WA coast. The Illmans, from Perth in Australia, took it home and popped it into the oven for five minutes to dry it out.

isis-killer-beheading-video-story-top African stars mourn Fiorentina captain Davide Astori — EXTRA TIME
Mar 07, 2018 - 11:47
The players in Genoa were warming up on the pitch when they were told of Astori's death and several walked off in tears. The club's match today has been postponed. "Often people say "the show must go on" but that's not always right for me".

isis-killer-beheading-video-story-top There are now more than 2200 billionaires in the world
Mar 07, 2018 - 11:47
While these sums are staggering, the world's richest individuals are probably richer than Forbes says, according to Bloomberg. With a net worth of $112 billion, Bezos has also become the first person in the world to amass a fortune of over $100 billion.

isis-killer-beheading-video-story-top Texas Democrats energized by early voting numbers
Mar 07, 2018 - 11:46
Donald Trump put the solidly Republican area into play-it narrowly went for Hillary Clinton during the 2016 presidential election. Other contenders include Dallas businessman Jeffrey Payne and Tom Wakely, a former congressional candidate from San Antonio.

isis-killer-beheading-video-story-top Eden Hazard considering Chelsea future due to Antonio Conte's negative tactics
Mar 07, 2018 - 11:46
To all intents and purposes, Conte has finalized his Chelsea career in a bad way and sullied his glowing CV. We haven't played with our qualities.

isis-killer-beheading-video-story-top AG Jeff Sessions In Sacramento Wednesday To Make 'Major Sanctuary Jurisdiction Announcement'
Mar 07, 2018 - 11:43
Acting ICE Director Thomas Homan lambasted Schaaf, claiming she let hundreds of people off the hook with her remarks. A representative for California Attorney General Xavier Becerra, D, could not immediately be reached for comment.