American national security bods on the US government's Committee on Foreign Investment in the United States (CFIUS) have asked Qualcomm to delay tomorrow’s vote on Broadcom’s proposed $117bn (£84.7bn) takeover.
With a timing to make even the most imaginative soap opera writer slap a palm to face and mutter "steady on now, people", the CFIUS order placed a 30-day hold on proceedings at the very last minute. This derails, temporarily at least, Broadcom’s acquisition ambitions.
The ongoing saga of Broadcom's attempts to acquire Qualcomm began late last year, with an initial offer of $103bn, which Qualcomm angrily rejected. An increasingly disbelieving world has since been subjected to the offer being raised and then dropped again following Qualcomm's acquisition of Dutch chipmaker, NXP.
Broadcom had already reacted negatively to CFIUS taking an interest in the deal and appears to be throwing its metaphorical toys out of its pram at this latest development.
In a statement issued today, Broadcom described the CFIUS development as “engagement theater” aimed at deferring the will of the Qualcomm stockholders.
It said: "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. This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom's independent director nominees."
The Singapore-based chip maker insists that upon completion of its redomiciliation to US shores by May 6, the deal will no longer be covered by CFIUS. Also, Broadcom state its board and senior management are mostly American.
So that’s ok then.
CFIUS takes a particular interest in transactions that it feels could harm US national security interests.
The transfer of San Diego-based Qualcomm’s technology to Broadcom would appear to have met that criteria for the time being at least.
With Broadcom turning the rhetoric up to 11 in this increasingly bitter battle for control, The Register has contacted Qualcomm for comment and awaits the response with interest. ®
*TITSUP = Toys Intentionally Thrown Straight Under Pram