Tech’s biggest takeover could be blocked by the US government
Broadcom’s bid to acquire Qualcomm for $117 billion may be stymied by US security concerns.
The news: Reuters says the US asked Qualcomm to postpone a shareholder meeting so it can scrutinize Broadcom’s bid for the chipmaker. The review will be conducted by the Committee on Foreign Investment in the United States (CFIUS), a body chaired by the US Treasury, which can recommend that deals be blocked.
What’s at stake: US-based Qualcomm is a leader in 5G wireless tech for things like driverless cars. Its sale could leave America more dependent on foreign suppliers. The firm resisted Broadcom’s efforts to acquire it and has lobbied for CFIUS to review the deal.
Broadcom’s take: It says national security concerns are overblown. The company points out that its CEO is an American, it’s in the process of moving its HQ to the US, and it and Qualcomm have institutional shareholders in common.
Why it matters: Tech security tensions are rising. The US recently stepped up efforts to block wireless tech made by Chinese firms like Huawei and ZTE, and it halted several major Chinese tech buyouts.
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