Broadcom Cries Foul As Qualcomm Delays Shareholder Vote On Takeover

Qualcomm building is shown in San Diego California U.S. Mike B  REU

"This is a very serious matter for both Qualcomm and Broadcom", the San Diego company said in a statement.

The vote was set to take place Tuesday at Qualcomm's annual shareholders meeting. That would give it a majority on Qualcomm's board. "A disruption of Qualcomm's R & D efforts would in effect hand the growing competition for 5G to China". The interagency body, which is known as Cfius, includes representatives from the Treasury and Justice Departments. "This measure will afford CFIUS the ability to investigate fully Broadcom's proposed acquisition of Qualcomm".

Broadcom on March 5 said the decision was the result of secret moves made by Qualcomm on January 29 to encourage an investigation by CFIUS into the proposed $117 billion buyout.

"Broadcom could not and will not control the Qualcomm board - the essential basis for CFIUS jurisdiction - in the event some or all of the independent, Broadcom-nominated directors are elected", the company said in a statement.

Broadcom, which was formerly a US-headquartered company before it rebased to Singapore for tax reasons, had announced plans to redomicile to the US. Broadcom has accused Qualcomm of failing to negotiate seriously, saying they were involved in "engagement theater".

Qualcomm said Broadcom's response to the delay "is a continuation of its now familiar pattern of deliberately seeking to mislead shareholders and the general public by using rhetoric rather than substance to trivialize and ignore serious regulatory and national security issues".

Broadcom said in November that it would return to the United States but did not say when the move would happen.

American national security bods at the Committee on Foreign Investment in the United States (CFIUS) have asked Qualcomm to delay tomorrow's vote on Broadcom's proposed $117bn (£84.7bn) takeover.

Cotton said in a statement that Qualcomm's work is "too important" to allow a hostile takeover by a foreign company.

Five other members of Congress signed the Gallagher letter on Friday that was sent to Treasury Secretary Steve Mnuchin.

Cornyn said Qualcomm is the leading US company in driving 5G development, and an acquisition by Broadcom could stall that and hand the leadership of 5G R&D to Huawei, a Chinese tech firm.

Analyst Stacy Rasgon at Bernstein Research doesn't see much likelihood that the CFIUS national security review would find grounds to block a merger.

Broadcom's proposed takeover of Qualcomm would be the largest deal ever in semiconductors, creating a chip juggernaut with a leading market position in many top chips used in smartphones.