Why CFIUS Is Intervening in Broadcom's Qualcomm Bid

Broadcom's Qualcomm bid gets a kick in the groin from the US government

The CFIUS said it views 5G as important for USA national security, and that it was concerned about the potential for Chinese tech companies getting more influence into 5G development in the United States.

Now, with Qualcomm using the CFIUS investigation as reason to push back the shareholder vote on the acquisition until at least April, Broadcom is launching its own charm offensive and pledging to pour money into the United States research and education fields with its $1.5bn fund promise.

"There can be no question that an American Broadcom-Qualcomm combination will provide far more resources for investments and development to that end", the company said.

One of the CFIUS's main concerns is that a Broadcom takeover could kill long-term R&D at Qualcomm, as the company would instead refocus on generating short-term profits.

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China's defense spending as a share of GDP and the budget also remains lower than that of other major nations, he said . This proposed change has proven controversial. "So many people have been leaving the White House".

The foreign entities were not named.

Broadcom used to also be a USA company until it relocated to Singapore in 2015 for tax purposes, and it is in the process of reincorporating in the U.S.

If Qualcomm's position is weakened, treasury said, Chinese companies like Huawei Technologies would gain an opening to become dominant.

While the intervention could scupper the deal, Broadcom is apparently still "optimistic" the CFIUS will approve any final deal, according to CNBC's sources, and the Singapore-based firm said in a statement that it is "fully cooperating" with the review.

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While some administrators may have been discussing security publicly, details might be more hard to share for some others. Students across the USA are planning a 17-minute walkout beginning at 10 a.m.to honor the lives of those lost.

The letter also confirmed that Qualcomm had requested an investigation by the panel of Broadcom's takeover of its panel of directors through a proxy vote.

Over the weekend, the government asked Qualcomm, which is based in San Diego, to delay its annual shareholder meeting by 30 days as it conducts its review. Broadcom blasted the move as a "blatant, desperate act" to entrench its incumbent board of directors.

"Qualcomm's partnership with the USA government encompasses efforts to address cybersecurity in the next generation of wireless, 5G and the Internet of things", treasury said.

To help allay concerns it would reduce spending on technology, Broadcom said it would create a new Dollars 1.5 billion fund "with a focus on innovation to train and educate the next generation of engineers in the US", the company said, adding this will ensure America's lead in future wireless technology.

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Other honchos in the list included Zara's Amancio Ortega, Google's Larry Page and Sergey Brin, and Alibaba's Jack Ma. Forbes' list contains 259 newcomers, including the first-ever cryptocurrency billionaires.

It said: "Importantly, Broadcom will fund enhanced R&D through lawful business practices rather than predatory and anticompetitive behaviour".

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