Categories Earnings, Technology

Qualcomm-Broadcom battle under CFIUS scrutiny

Qualcomm (QCOM) – Broadcom (AVGO) battle has off late witnessed some tense and nail-biting moments. The latest twist in this battle took place when Broadcom announced that chip maker Qualcomm had secretly approached the U.S. national security panel early this year, requesting them to investigate this deal. The U.S. government has responded to this by asking Qualcomm to postpone the company’s March 6 annual shareholder meeting by a month.

The upcoming annual shareholder meeting was an event that had all the industry watchers attention, as it would be decided whether the six nominees recommended by Singapore-based Broadcom would gain control over Qualcomm. If it did happen, it was a clear message that the shareholders support the hostile takeover by Broadcom. But this has been intervened by Qualcomm’s latest approach to the Committee on Foreign Investment in the United States (CFIUS).

CFIUS is a committee that reviews the foreign acquisitions of U.S. firms to determine whether an acquisition will result in a threat to the national security. Though the CFIUS cannot block a deal, it can impose certain changes.

Courtesy: Maurizio Pesce / Flickr

Broadcom, which recently cut its offer price for Qualcomm by 4% to $117 billion, was under the impression that the only barrier in its way was Qualcomm’s acquisition of NXP Semiconductors. But now the entire Broadcom-Qualcomm deal has fallen under the security scanner.

This latest plot that unfolded came as a surprise to Broadcom, who openly showed its disappointment, stating Qualcomm had never made any reference to submitting a voluntary notice to CFIUS during the earlier interactions.

Broadcom, which earlier revealed its commitment to redomicile to the U.S., is expected to get all the required approvals by the end of its second fiscal quarter this year i.e. May 6, 2018. Considering this, Broadcom argues that this takeover does not require to be reviewed by the CFIUS.

Despite these hurdles, Broadcom never gave any sign of giving up and is determined to acquire Qualcomm, which is making every possible move to stay independent. The determined Broadcom says it understands the importance of CFIUS and will offer its complete co-operation towards the committee.

Most Popular

INTU Earnings: Intuit reports higher revenue and profit for Q2 2024

Financial technology company Intuit Inc. (NASDAQ: INTU) reported higher adjusted earnings and revenues for the second quarter of 2024. Earnings also exceeded Wall Street's projection. At $3.39 billion, second-quarter revenues

Nvidia (NVDA) looks set to thrive on AI power in the long term

Nvidia Corporation (NASDAQ: NVDA) this week reported blockbuster results for the fourth quarter of 2024, aided by the graphic card behemoth’s booming AI business. The Q4 outcome matched its blowout

What to look for when Lowe’s (LOW) reports Q4 2023 earnings

Shares of Lowe's Companies, Inc. (NYSE: LOW) stayed green on Wednesday. The stock has gained 15% over the past three months. The home improvement retailer is scheduled to report its

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top