Roger Fingas
The U.S. government considers there to be possible national security risks in Broadcom's proposed $117 billion acquistion of Qualcomm, enough to warrant a full-scale investigation, the U.S. Treasury's deputy assistant secretary for investment security said in a letter to the two Apple suppliers.
Specifically the government is concerned about Broadcom's connections with foreign parties, Aimen Mir wrote in the letter, seen by Reuters. He did not however explain who the parties might be.
The missive follows the Treasury's Committee on Foreign Investment (CFIUS) issuing an order for Qualcomm to delay a shareholders meeting 30 days. Broadcom is hoping to get six friendly nominees elected to Qualcomm's board of directors, paving the way for a hostile takeover.
One source told Reuters that CFIUS may be motivated by concerns in the U.S. military that if Broadcom buys Qualcomm, China's Huawei may indirectly be able to gain dominance in 5G cellular development. Huawei is known to have close ties to the Chinese government, which could in turn use control of 5G as a strategic advantage.
Apple depends on Qualcomm for cellular chips, but the two companies are also embroiled in a global legal battle over patents and royalties. A Broadcom buyout of Qualcomm could prove beneficial to Apple, both for the chance of ending lawsuits and possible supply deal benefits.
Broadcom is currently based in Singapore, but is in the process of relocating its corporate headquarters to the U.S.
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30 Comments
I guess they’re payed to be paranoid...
But, Qualcomm isn’t the only company working 5G...
This is no different the situation faced by the country with steel. At some point we will be down to one company or dependent upon another country to supply us steel.
Bad for competitions.....stop the deal.
Qualcomm can do it and will surely settled w Apple
The US obsession with Huawei again.
"Huawei is known to have close ties to the Chinese government"
Huawei has always strongly denied any such ties so I don't know how it can be 'known' to have them.
In fact, it has been denying it since at least 2011.
The Qualcomm story over the last few months certainly makes for an interesting read. The latest twist shows that it is impossible to predict the final outcome yet. Once the dust has settled l hope Daniel E Dilger will write a piece about it in his usual way.