USA regulators have asked giant chipmaker Qualcomm to delay an annual shareholder meeting to give them more time to investigate whether a takeover bid by Broadcom, a Singapore company that is in the process of moving to San Jose, would threaten US national security.
U.S. Senator Tom Cotton said on Monday he backed a U.S. government panel's decision to delay a Qualcomm Inc (QCOM.O) shareholder meeting to allow for a more extensive review of Broadcom Ltd's(AVGO.O) takeover bid.
The order adds to signs that Broadcom's promise to move its official base back to the United States before it completes the proposed $117 billion takeover may not be enough for USA officials at a time when global trade tensions are rising.
Broadcom executives a year ago started the process of moving the company's headquarters from China to the United States, a move that could remove numerous hurdles in future acquisitions.
"This was 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".
Trump praised the move at the time, calling Broadcom "one of the really great, great companies". Broadcom has nominated six people to serve on Qualcomm's 11-member board of directors.
"The CFIUS issued an interim order to Qualcomm directing it to postpone its annual stockholders meeting and election of directors by 30 days", said a spokesperson from the U.S. Department of the Treasury, which chairs the interagency regulatory committee. The company already is run from the United States, has many US employees, and owns critical semiconductor operations and technologies, Rasgon noted.
"Broadcom continues to pursue the redomiciliation process as expeditiously as possible", Broadcom said."Upon completion of the redomiciliation, Broadcom's proposed acquisition of Qualcomm will not be a CFIUS covered transaction".
They were joined late Friday by five other members of Congress, led by Wisconsin Republican Mike Gallagher. The takeover was to have come at a meeting scheduled for tomorrow, March 6. An increasingly disbelieving world has since been subjected to the offer being raised and then dropped again following Qualcomm's acquisition of Dutch chipmaker, NXP. 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. Getting NXP into the fold would increase Qualcomm's presence in such areas as 5G, the internet of things and autonomous vehicles.