The U.S. government has come in and intervened in what could potentially be the technology industry’s biggest potential takeover, the Wall Street Journal reports. They’ve requested that a key shareholders vote be postponed on grounds that the deal could endanger the country’s technological proficiency and, cause issues to national security as well.
The Committee on Foreign Investment in the U.S., an interagency group that’s chaired by the Treasury Department that’s able to recommend president to block deals, has given orders to Qualcomm to delay its annual shareholders meeting by 30 days. The reason for this is to give CFIUS time to review Broadcom’s proposed $117 billion takeover bid of Qualcomm. Qualcomm’s shareholders were set to meet and vote on Tuesday on whether to replace six of the company’s 11 directors with nominees that were suggested by Broadcom. If this were to pass, it would drastically increase the changes Broadcom achieve the takeover.
Previously, Qualcomm has rejected Broadcom’s advanced for a takeover, consistently pointing to a national security review as something that could block the deal. In January, the company requested CFIUS come and review Broadcom’s bid for the takeover.
CFIUS told both companies that it was starting an accelerated review of the potential takeover deal before it gets signed. They’re skipping the typical 30-day preliminary assessment period and going straight into investigating whether there’s potential national security threats involved, according to sources familiar with the matter. Broadcom in its part has said that it would fully cooperate with CFIUS’s review. Qualcomm has delayed the shareholder vote and other business until April 5 so that it gives CFIUS time to investigate and review the bid.