Qualcomm AGM delayed as U.S. investigates security concerns at Broadcom

Qualcomm AGM delayed as U.S. investigates security concerns at Broadcom”

Once this all blows over, Qualcomm's shareholder meeting will be rescheduled to take place on or before the 6th of May.

T. Rowe voted for all six of Broadcom's nominations, a move which, if followed by enough other shareholders, would give the bidder control of the 11-person Qualcomm board that has so-far shunned the approach.

Qualcomm has pushed back a shareholder meeting that would have determined the fate of a takeover attempt by Broadcom, following a request by the Committee on Foreign Investment in the United States (CFIUS).

The Committee on Foreign Investment in the United States (Cfius), a panel made up of different USA government departments, asked Qualcomm to delay its annual meeting for 30 days so that it could "fully investigate" Broadcom's proposed deal.

In dueling statements, Broadcom officials claimed the investigation was undertaken at Qualcomm's request without their knowledge, while Qualcomm officials said the suggestion that the CFIUS investigation was coming as a surprise to Broadcom "has no basis in fact". Broadcom had two meetings on February 14, 2018 and on February 23, 2018 with Qualcomm.

"This can only be seen as an intentional lack of disclosure - both to Broadcom and to its own stockholders", the Singapore-based chipmaker said in a statement. This brings Qualcomm's "engagement theater" to a new low, " Broadcom said.

Qualcomm did not deny seeking a CFIUS review but accused Broadcom of using misleading rhetoric "to trivialize and ignore serious regulatory and national security issues". The interagency body, which is known as Cfius, includes representatives from the Treasury and Justice Departments.

Qualcomm said it would comply with the order and delay its shareholder meeting at least 30 days.

"Broadcom's dismissive rhetoric notwithstanding, this is a very serious matter for both Qualcomm and Broadcom". But deals involving foreign companies, especially those of sensitive US technology like semiconductors, have increasingly been in the spotlight.

Prior to Gallagher's letter, Sen. Scott Peters, D-San Diego, and Duncan Hunter, R-Alpine, had called for a review of the deal, the San Diego Union-Tribune reported. Broadcom also has promised to move its headquarters to the USA, which could mean CFIUS would have no authority to block the merger.

Broadcom is pursuing a hostile takeover of Qualcomm, which would be the largest technology deal in history, creating a giant chip maker whose products would be in the majority of the world's smartphones. It would also risk cutting off clients worth billions of dollars in business every year.

Qualcomm went on to challenge an assertion that wasn't exactly what Broadcom had asserted.

In a February 26 letter to Treasury Secretary Steve Mnuchin, Rep. John Cornyn, R-Texas, the second-ranking Republican in the House of Representatives, asked Mnuchin to have CFIUS get involved given not only that a China-based company was trying to buy an American entity, but that it was doing so through a hostile takeover.

Qualcomm's headquarters in Sorrento Valley.

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