London: Broadcom Ltd.’s hostile $117 billion bid for Qualcomm Inc. faces a major roadblock after the powerful Committee on Foreign Investment in the US (CFIUS) issued an interim order for the target to delay its investor meeting.
CFIUS has imposed an order to investigate the proposed acquisition and delay the meeting for 30 days, according to an emailed statement Monday. Investors were scheduled to vote Tuesday on six Broadcom nominees, potentially giving it a majority of Qualcomm’s board.
Broadcom slammed Qualcomm’s decision to “secretly" file a voluntary request with CFIUS to start an investigation, labelling it a “blatant, desperate act" to entrench its incumbent board of directors.
CFIUS, which conducts its reviews far from the public eye, was split on whether to review Broadcom’s increasingly hostile effort to win control of its rival, Bloomberg reported last week. San Diego-based Qualcomm, fighting to stay independent, has repeatedly warned an acquisition would face regulatory scrutiny.
Hock Tan, Broadcom’s chief executive officer, joined US President Donald Trump in the White House last year to announce he was moving Broadcom’s headquarters to the US from Singapore—a move that appeared designed to appease US officials and facilitate future acquisitions.
Foreign acquisitions of sensitive US technology like semiconductors tend to draw heightened scrutiny from CFIUS, as do acquisitions by Chinese buyers. President Trump last year blocked a Chinese-backed takeover of Lattice Semiconductor Corp. because of the importance of semiconductors to the US government and China’s role in the proposed acquisition.
Once Broadcom re-domiciles—currently planned for no later than 6 May—the takeover would not be a CFIUS covered transaction, Broadcom said in the statement. Bloomberg