Qualcomm annual meeting postponed for national security review

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Singapore-based Broadcom said it was informed Sunday night that Qualcomm had filed a request with the inter-governmental Committee on Foreign Investment in the United States to initiate an investigation.

Qualcomm and Broadcom were not immediately available for comment.

The rival chipmaker accused Qualcomm of "secretly" seeking a voluntarily CFIUS review in January and failing to disclose the move to Broadcom during merger talks.

"This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees", Broadcom said in a statement.

Broadcom shares edged down 0.9 percent in afternoon trading, while Qualcomm fell 1.4 percent.

Broadcom was a United States company until it was bought in 2016 by Singapore's Avago, which chose to use the name Broadcom.

Cotton said in a statement that Qualcomm's work is "too important" to allow a hostile takeover by a foreign company. Broadcom "expects to complete its redomiciliation process to the U.S.by May 6, at which point the proposed acquisition will not be a CFIUS covered transaction", Zino wrote in a report on Monday.

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"We can not overstate the likely harm (from a Broadcom hostile takeover) that would result to Qualcomm, the USA company leading the development of 5G and other next-generation technologies, as well as to the United States security interests", said the Gallagher letter.

In a statement issued today, Broadcom described the CFIUS development as "engagement theater" aimed at deferring the will of the Qualcomm stockholders.

Broadcom is incorporated and now based in Singapore, but CEO Hock Tan announced late past year while visiting President Donald Trump at the White House that the company would return its corporate headquarters to the US, likely using San Jose as a base.

The entire CFIUS review could be moot once Broadcom moves its legal headquarters back to the United States, analyst Angelo Zino at CFRA Research, noted.

They were joined late Friday by five other members of Congress, led by Wisconsin Republican Mike Gallagher.

Last month Qualcomm also unveiled a sweetened $44 billion agreement to buy NXP Semiconductors NV (NXPI.O) to expand its presence in automotive chips and build its defense against Broadcom's hostile bid.

"We can not overstate the likely harm that would result to Qualcomm, the USA company leading the development of 5G and other next-generation technologies, as well as to United States security interests", the letter said. A combined Broadcom-Qualcomm would create the world's third-largest chip maker, behind Samsung and Intel.

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