Broadcom's buyout of Qualcomm is likely to see even more delays

Broadcom's buyout of Qualcomm is likely to see even more delays

Broadcom's buyout of Qualcomm is likely to see even more delays

It appears that Broadcom is looking to get ahead of any potential regulatory concerns that might result from its ongoing aggressive effort to acquire Qualcomm.

"The bottom line is that a combined, American Broadcom-Qualcomm will be a more focused and stronger champion for sustained United States leadership in 5G than a standalone Qualcomm, an outcome that strongly supports America's national security interests", Broadcom stated in its letter.

Broadcom pared that back to $117 billion last month after Qualcomm raised its own price for chip maker NXP to $44 billion.

Broadcom is based in Singapore, which gives CFIUS jurisdiction to investigate.

The company also did a bit of chest thumping in its letter, pointing out shareholder returns have been eight times greater than that of Qualcomm's over the past five years.

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The Committee on Foreign Investment in the United States, which is now looking into whether a merger would harm national security, expressed concerns that a Broadcom takeover of Qualcomm would undermine U.S. efforts to stay ahead of China in the development of 5G tech. It will also create a new $1.5 billion fund to train engineers in the United States. Qualcomm and a spokesman for the U.S. Treasury, which chairs CFIUS, declined to comment. The job of CFIUS is to review acquisitions of USA companies by foreign entities to assess potential national security implications.

U.S. semiconductor giant Broadcom, who has been after buying smartphone chip from Qualcomm for quite some time, is likely to have to wait even longer thanks to management opposition and United States national-security concerns.

"It is not the 5G investment that the US government should be concerned about", said McGregor. Mir noted that Huawei and other Chinese companies have increased their investments in 5G technology and that Huawei owns about 10 percent of essential 5G patents. Broadcom said in a statement: "With its proven track record of investing in and growing core franchises, Broadcom is committed to making the U.S. the global leader in 5G". "Broadcom will not only maintain the R&D resources Qualcomm devotes to 5G and innovation in future wireless standards - we will also focus R&D spend to those critical technologies that are essential to the USA", says Broadcom. We are now in the final stages of redomiciling to the United States, and that process will be complete no later than May 6, 2018.

Enderle questioned what is driving Broadcom to make its hostile takeover bid and said USA regulators should work to see who might be behind the push, a question he said is of more importance than 5G. "Broadcom has an experienced team and would know that, from a financial standpoint, this will be a disaster".

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