Qualcomm's board members, including several seats controlled by Broadcom, were set to vote on Broadcom's acquisition attempt on Tuesday. However, the annual shareholder meeting has been postponed for 30 days by the Committee on Foreign Investment in the United States:
Broadcom Ltd. is on course to win all six of the seats it's seeking on Qualcomm Inc.'s board, giving it a majority to push forward with its hostile takeover even as a U.S. government panel forced a delay of the final tally amid concerns about the deal's threats to national security.
Based on a count of more than half of the votes already cast, Broadcom would win a majority of Qualcomm's board seats, according to information obtained by Bloomberg. If that result holds up when the final vote takes place, Broadcom would have a mandate to overturn Qualcomm management's opposition to the $117 billion deal. Representatives for Broadcom and Qualcomm declined to comment.
The Committee is taking preemptive action this time:
The panel, the Committee on Foreign Investment in the United States, or Cfius, typically works behind closed doors and reviews deals only after they are announced. In the case of Qualcomm, the panel, which includes representatives from multiple government agencies, is looking at the acquisition before it is complete. In practice, reviews by Cfius often lead to the demise of deals.
[...] Already, Cfius has taken a more proactive role, blocking several major deals by Chinese buyers in recent months. Among them were proposed acquisitions of MoneyGram, a money transfer company, and Lattice Semiconductor.
Previously: President Trump Blocks Acquisition of Lattice Semiconductor
Broadcom Raises Bid for Qualcomm to $121 Billion
Related Stories
President Trump has blocked Canyon Bridge Capital Partners LLC from acquiring Lattice Semiconductor Corporation, using the authority granted by the Exon–Florio Amendment. Lattice Semiconductor makes programmable logic devices including field programmable gate arrays (FPGAs):
President Trump on Wednesday blocked a China-backed investor from buying an American semiconductor maker over national security concerns, a rare move that could signal more aggressive scrutiny of China's deal-making ambitions. The deal for Lattice Semiconductor has provided a test of the president's economic and diplomatic relationship with China.
[...] The White House said on Wednesday that it prevented the acquisition of Lattice Semiconductor, in part because the United States government relies on the company's products. The integrity of the semiconductor industry, it said, was vital.
The White House also raised concerns over the buyer's close ties to Beijing. The investment group included China Venture Capital Fund Corporation, which is owned by state-backed entities, the White House said.
The decision could foretell trouble for other Chinese deals under review by the Committee on Foreign Investment in the United States, a multiagency group that examines takeovers of American companies by foreign buyers and makes recommendations to the president. The group, which operates largely in secrecy, is also looking at the proposed purchase of MoneyGram International by Ant Financial, an affiliate of the Chinese technology giant Alibaba Group.
Broadcom Raises Hostile Bid for Qualcomm to About $121 Billion
Broadcom Ltd. has raised its bid for Qualcomm Inc. to about $121 billion, in an attempt to force what could be the largest-ever technology deal.
The new offer of $82 a Qualcomm share will be Broadcom's final offer, according to a statement Monday. The deal would take the form of $60 in cash and the remainder in Broadcom shares.
Qualcomm's board previously rejected Broadcom's original $105 billion acquisition, and has since dug in against the threat of a takeover, with Chief Executive Officer Steve Mollenkopf dismissing the bid as not being worth consideration.
Broadcom also plans to offer Qualcomm a higher-than-usual breakup fee in the event regulators thwart the deal, according to the sources. Typically, such break-up fees equate to approximately 3 percent to 4 percent of a deal's size.
Previously: Broadcom Offers $105 Billion for Qualcomm; Moves HQ Back to the USA
Broadcom has sent a letter to Congress:
Broadcom Limited said, in a letter to Members of Congress regarding its offer to acquire Qualcomm Inc., that it is committed to making the United States the global leader in 5G by focusing resources and strengthening leadership in this area. Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in 5G is completely unfounded. In addition, Broadcom will not sell any critical national security assets to any foreign companies. Of course, any dispositions of assets to foreign buyers would be themselves subject to CFIUS review.
Broadcom is also pledging to create a new $1.5 billion fund with a focus on innovation to train and educate the next generation of RF engineers in the United States. This will ensure America's continued leadership in future wireless technology.
Broadcom also said it will work closely with the United States government as it drives to achieve and sustain this global leadership in 5G and beyond.
Broadcom also smeared Qualcomm's "anticompetitive licensing practices", and created an infographic "to set the record straight about Qualcomm's business relationships in China".
See also: The incredible multi-dimensional chess of Qualcomm vs. Broadcom
Previously: Broadcom's Hostile Takeover Attempt of Qualcomm Delayed by U.S. Government Panel
Broadcom's quest to acquire Qualcomm has come to a screeching halt:
President Trump on Monday blocked Broadcom's $117 billion bid for the chip maker Qualcomm, citing national security concerns and sending a clear signal that he was willing to take extraordinary measures to punctuate his administration's increasingly protectionist stance. In a presidential order, Mr. Trump said there was "credible evidence" that led him to believe that if Singapore-based Broadcom were to acquire control of Qualcomm, which is based in San Diego, it "might take action that threatens to impair the national security of the United States."
[...] The move follows one by the Committee on Foreign Investment in the United States, which typically works behind closed doors and reviews deals only after they are announced, earlier this month to stall Broadcom's bid because of national security concerns. [...] The president said his decision had been based on the review by the committee, which focused on how Broadcom's purchase of Qualcomm might affect next-generation high-speed mobile networks known as 5G. The panel said that the leadership of Qualcomm, which makes wireless chips and also licenses key wireless patents, was too important to put into hands of a company with links to China. The committee argued that economic leadership in 5G was also a national security interest.
The Committee on Foreign Investment in the United States has just put a lot of companies on notice.
Previously: Broadcom's Hostile Takeover Attempt of Qualcomm Delayed by U.S. Government Panel
Broadcom Pleads its Qualcomm Case to Congress
Related: President Trump Blocks Acquisition of Lattice Semiconductor
U.S. Lawmakers Urge AT&T to Cut Ties With Huawei
U.S. Government Reportedly Wants to Build a 5G Network to Thwart Chinese Spying
U.S. Rejects Chinese Takeover of the Chicago Stock Exchange
Broadcom has moved back to the U.S. from Singapore, which could allow it to circumvent the mighty power of the Committee on Foreign Investment in the United States (CFIUS), which blocked its takeover attempt of Qualcomm last month. The company's co-headquarters in San Jose, California will become the sole headquarters of the redomiciled company:
Broadcom said on Wednesday it had completed its move back to the United States from Singapore, weeks after President Donald Trump blocked its $117 billion offer to buy Qualcomm on national security grounds.
Broadcom, which was a U.S. company until it was bought in 2016 by Singapore's Avago, had announced its plan to redomicile on Nov. 2, days before making its first offer for Qualcomm.
[...] The move to the United States could allow Broadcom to buy U.S. companies without coming under the scrutiny of the Committee on Foreign Investment in the United States (CFIUS), which has the power to stop deals that could harm national security.
(Score: 1, Disagree) by Anonymous Coward on Tuesday March 06 2018, @06:28PM (2 children)
The U.S. government, via the Federal Reserve, has engaged in a very anti-capitalism tactic: The large-scale counterfeiting of the U.S. dollar; the result is that creditors of the U.S. (e.g., foreigners like China) are holding onto a shitload of what is actually worthless currency units.
Why has Broadcom stock gone up 8x in 5 years? Simple: China has dumped some of its counterfeit dollars into that corporation, so as to try to use the mechanisms of capitalism to convert those useless dollars into something worthwhile, namely ownership over a large and important company, Qualcomm.
Of course, the U.S. government is no friend of capitalism; it never was. To fight a problem caused by engaging in anti-capitalism, the U.S. government will once again engage in anti-capitalism by intervening in an otherwise perfectly legitimate move by Broadcom.
You want to understand the world, folks?
It's anti-capitalism all the way down.
(Score: 2) by bob_super on Tuesday March 06 2018, @07:39PM (1 child)
You're not really clear. Are you for or against the creation of yet another too-big-to-fail corporation, which will send profits abroad but get US tax breaks and could have to be saved by the US taxpayer because many of the chips made by the monopoly will end up in strategic assets?
Capitalism doesn't care about anything but ROI. Yo udon't need to love Marx to witness how it's regularly an issue.
(Score: 1, Informative) by Anonymous Coward on Tuesday March 06 2018, @07:45PM
The whole notion of an organization being declared "too big to fail" and thereby "saved by the US taxpayer" is a clear example of anti-capitalism; indeed, they are a clear example of the U.S. government engaging in anti-capitalism.
It's anti-capitalism all the way down, folks.
(Score: 2) by frojack on Tuesday March 06 2018, @07:21PM
The Register [theregister.co.uk] has also reported wome worries about the deal.
I just wish the blue proxies and white proxies would stop flooding my inbox just because I happen to own a few shares of Qualcomm from way back.
No, you are mistaken. I've always had this sig.
(Score: 2) by Sourcery42 on Tuesday March 06 2018, @09:37PM
Broadcom is a dead shell since Avago acquired them. Their business model is just acquisition. Qualcomm is at the leading edge of mobile SoC and communications, but that's likely to stagnate under Broadcom. The US gubmint can't have alternatives like Kirin hisilicon start to look like attractive alternatives or even pull ahead. They told us so https://soylentnews.org/article.pl?sid=18/01/17/1513246 [soylentnews.org]