Broadcom appeases U.S. on 5G investment

Broadcom appeases U.S. on 5G investment

Broadcom appeases U.S. on 5G investment

Broadcom officials also promised to establish a $1.5 billion fund to educate and train new engineers in the country.

The previously undisclosed requirement shows that the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign acquisitions of USA companies for potential national security risks, is aware that its jurisdiction could be contested if Broadcom redomiciles to the United States.

Any belief that a collaborated Broadcom-Qualcomm would cede leadership or slash funding to 5G is entirely unfounded. "Once they have control, the USA government loses much of its leverage to force compliance and Broadcom has to know this".

Broadcom invests differently than Qualcomm, said McGregor.

In Broadcom's increasingly contentious bid to acquire chip-making rival, 5G networking has emerged to become has drawn the attention of regulators and lawmakers overtaking other issues such as the billions that Broadcom is willing to spend on the deal and oversized influence the combined companies would have in the global technology industry. The review of Broadcom's bid illustrates the US government's expanding focus on the competitiveness of the national semiconductor industry as China advances.

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"Hostile takeovers typically destroy the viability of the acquired asset because they are massively disruptive and the acquired employees aren't slaves and will oppose the new management", he said.

CFIUS has the power to block acquisitions on national security grounds.

Over the weekend, the government asked Qualcomm, which is based in San Diego, to delay its annual shareholder meeting by 30 days as it conducts its review. They were to have voted on Broadcom's nominations for six replacement Qualcomm board members - if successful, the predator would have gained a potential majority on the 11-person board, paving the way for acceptance of its bid. This meeting will be held on March 23, the company said.

"Broadcom will not sell any critical national security assets to any foreign companies", the letter said.

CFIUS, an inter-agency panel led by the U.S. Treasury, rarely reviews mergers before a deal has been clinched. FT continues: "Cfius took issue with Broadcom's "private equity-style" plans, which it wrote could lead to a reduction in Qualcomm's large research and development budget in favour of "short-term profitability". Broadcom's dipped $3.91 at $247.05.

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