The panel that is reviewing Broadcom’s bid for Qualcomm, which is worth $117 billion, has sent out a warning that it will refer this deal to President Trump for possible rejection. This has further reduced the possibility of one of the biggest deals in technology sector history.
The panel sent out a letter to both the companies stating that the offer made by Broadcom has serious security implications at a national level. Currently, Broadcom is headquartered in Singapore. However, it will soon be shifting its base to the United States. This threat by the panel, known as CFIUS, will stall the quest of Broadcom to buyout the chip manufacturer.
CFIUS has already delayed the annual shareholder meeting of Qualcomm by a month. In the board meeting, Broadcom was expected to win some seats on Qualcomm’s board, if not a majority.
The trend has been that under President Trump, the majority of deals that involved foreign buyers have been squished after a review by CFIUS. This includes cases like Moneygram’s sales to an affiliate of Alibaba Group and the sale of Lattice Semiconductor to an investment firm that is reported to have close ties with the Chinese government.
In order to address the national security concern, Broadcom has been actively trying to bring its headquarters back to the United States. On Friday, the company announced that it would move up a shareholders’ vote on the move from May 6 to March 23. That would let Broadcom relocate by April 3, ahead of Qualcomm’s rescheduled shareholder meeting.
However, in the letter CFIUS stated that Broadcom had violated the panel’s order by moving up the relocation date, without proper consultation with the government.