U.S. regulators hit pause on Broadcom bid for Qualcomm
Broadcom said it is "disappointed" that a shareholder meeting — where it hoped to gain control of Qualcomm's board — will be delayed by a U.S. government inquiry requested by Qualcomm itself.
Why it matters: Broadcom has been seeking control of Qualcomm's board in order to force consideration of its takeover bid, which has thus far been rejected. The shareholder meeting was originally slated for Tuesday.
The Committee on Foreign investment in the U.S (CFIUS). which is reportedly now looking into the issue, is a government panel tasked with looking into overseas investments in U.S. companies. It typically doesn't weigh a transaction until a deal is reached. (TechCrunch has a good explainer on CFIUS here.)
Government action: The government said that a 30-day delay will allow CFIUS "the ability to investigate fully Broadcom’s proposed acquisition of Qualcomm."
- Last week Axios reported on how Sen. John Cornyn (R-TX) had asked Treasury for a Committee on Foreign Investment (CFIUS) review prior to Tuesday's vote, which would have asked Qualcomm shareholders to pick between director slates proposed by each company. Axios also has seen similar letters sent by Rep. Duncan Hunter (R-CA) to both President Trump and Defense Secretary Mattis.
- The WSJ's editorial board reported just last night that CFIUS had declined to conduct such a review, which seems to have been incorrect.
- Broadcom is accusing Qualcomm of surreptitiously asking for a review. No response yet from Qualcomm, but don't be surprised if it takes exception to the claim.
History lesson: Broadcom made a $103 million bid for Qualcomm back in November, which Qualcomm's board rejected. That prompted Broadcom to move in December to seek control of Qualcomm's board.
Also: Qualcomm today extended its tender for NXP Semiconductors to market close Friday. Remember that Qualcomm recently raised the price to both appease NXP shareholders and also to poison the waters for Broadcom.