U.S. Calls Broadcom’s Bid for Qualcomm a National Security Risk
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U.S. Calls Broadcom’s Bid for Qualcomm a National Security Risk
By ALAN RAPPEPORT and CECILIA KANGMARCH 6, 2018
The United States government said Broadcom’s proposed acquisition of rival chipmaker Qualcomm could pose a national security risk
and called for a full investigation into the hostile bid.
A government panel, the Committee on Foreign Investment in the United States, or Cfius, noted, in part,
that the potential risk was related to Broadcom’s relationships with foreign entities, according to a letter from a United States Treasury official.
“China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover,” the official said in the letter.
The panel began to scrutinize tech-related foreign investments more closely during the Obama administration, as Chinese companies
and investors began rapidly funneling money into American firms.
“The Trump administration turbocharged it,” said Tony Balloon, the leader of the corporate China law practice at the law firm Alston & Bird.
The move complicates an already contentious deal and increases the likelihood
that Broadcom, which is based in Singapore, will end its pursuit of Qualcomm.
It also said that the deal could weaken “Qualcomm’s technological leadership,” giving an edge to Chinese companies like Huawei.
Cfius has recently blocked several deals by Chinese buyers, including Ant Financial’s proposed takeover of MoneyGram, a money-transfer company.
By ALAN RAPPEPORT and CECILIA KANGMARCH 6, 2018
The United States government said Broadcom’s proposed acquisition of rival chipmaker Qualcomm could pose a national security risk
and called for a full investigation into the hostile bid.
A government panel, the Committee on Foreign Investment in the United States, or Cfius, noted, in part,
that the potential risk was related to Broadcom’s relationships with foreign entities, according to a letter from a United States Treasury official.
“China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover,” the official said in the letter.
The panel began to scrutinize tech-related foreign investments more closely during the Obama administration, as Chinese companies
and investors began rapidly funneling money into American firms.
“The Trump administration turbocharged it,” said Tony Balloon, the leader of the corporate China law practice at the law firm Alston & Bird.
The move complicates an already contentious deal and increases the likelihood
that Broadcom, which is based in Singapore, will end its pursuit of Qualcomm.
It also said that the deal could weaken “Qualcomm’s technological leadership,” giving an edge to Chinese companies like Huawei.
Cfius has recently blocked several deals by Chinese buyers, including Ant Financial’s proposed takeover of MoneyGram, a money-transfer company.