Broadcom has been under investigation by the Committee on Foreign Investment in the United States (CFIUS) over concerns the company's buyout of Qualcomm could stifle the chipmaker's development of 5G technologies. However, the company issued another press release indicating that they were withdrawing their offer to acquire Qualcomm, but would still be moving forward with its redomiciliation process.
Broadcom nevertheless pressed ahead, hoping to appeal to shareholders over the heads of the Qualcomm board with a plan that would fill it with Broadcom nominees, forcing the company's hand.
Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.
Broadcom said earlier this year it would fully be a US domiciled company by May 6. While the change in headquarters has been in the works since late previous year, the earlier date would complete the process before a scheduled vote by Qualcomm shareholders. Lawmakers accused the company of having close links to Beijing, and said it posed a threat to U.S. national security.
The US Committee on Foreign Investment in the US (CFIUS) does not usually get involved in transactions involving foreign and US companies until a deal is formally signed and announced. The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property.More news: Mark Hamill named as global guest of honour for St. Patrick's Festival
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The deal would have combined two computer chip leaders.
Shares in Qualcomm fell 4.83% at 9:20am in Frankfurt.
As part of its attempts to persuade Qualcomm stockholders, and USA government and regulators Broadcom promised to shift its headquarters to the US.
Broadcom on its part had meant to move its official headquarters to the U.S., which would reduce the amount of oversight necessary to make the takeover work.
There's a clear lesson in all of this: Donald Trump is willing to go quite far to protect American companies from foreign competition, particularly in the technology sector, and particularly from China. "He's of the view that there is a lot of value to be extracted from this industry", said Bernstein analyst Stacy Rasgon.