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Qualcomm takeover bid halted by United States government

Qualcomm takeover bid halted by United States government”

It has asked Qualcomm to delay the election of directors by 30 days to give it time to "fully investigate" the proposed deal, according to an email from the Treasury Department.

Before announcing its first bid for Qualcomm, Broadcom had announced that it would begin the corporate redomiciling process to the United States after having been moved from there in 2015. Any Broadcom candidates elected would be required to act in the best interest of Qualcomm and its shareholders.

"Broadcom was informed on Sunday night that on January 29, 2018, Qualcomm secretly filed a voluntary request with CFIUS to initiate an investigation, resulting in a delay of Qualcomm's Annual Meeting 48 hours before it was to take place", Broadcom said in a statement issued last night.

The ongoing saga of Broadcom's attempts to acquire Qualcomm began late past year, with an initial offer of $103bn, which Qualcomm angrily rejected.

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"It should be clear to everyone that this is part of an unprecedented effort by Qualcomm to disenfranchise its own stockholders", Broadcom said in a statement. Broadcom has accused Qualcomm of failing to negotiate seriously, saying they were involved in "engagement theater".

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Qualcomm has repeatedly rejected multiple Broadcom offers that it says undervalue the company. Despite those issues, Qualcomm officials have met with Broadcom executives and last month kept open the possibility of continued talks over price and other concerns.

The Qualcomm statement said CFIUS is an independent governmental body charged with protecting USA national security and "has determined that there are national security risks to the United States as a result of and in connection with the transaction proposed by Broadcom".

Qualcomm, one of Apple's main suppliers, is now engaged in the acquisition of the Dutch group NXP and has indicated the operation will proceed regardless of the outcome of discussions with Broadcom. But it now appears willing to continue to pursue its bid for Qualcomm through the CFIUS review, said Bernstein Research Analyst Stacy Rasgon in a research note.

Qualcomm went on to challenge an assertion that wasn't exactly what Broadcom had asserted. "It typically doesn't weigh a transaction until a deal is reached". Broadcom then reduced its offer for Qualcomm to $79 a share.

Reuters had reported last week that the panel, which can stop mergers that could harm USA security, had begun looking at Broadcom's bid, after pressure from politicians including senior Republican Senator John Cornyn.



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