Published: Thu, March 15, 2018
Science | By Eileen Rhodes

Intel has considered Broadcom bid if Qualcomm deal goes through

Intel has considered Broadcom bid if Qualcomm deal goes through

The company will want everything to go smoothly and just to avoid a lengthy national security review, the Singapore-based company is planning to relocate its global headquarters to the April 3. Broadcom is now headquartered in Singapore, where it relocated from the USA for tax purposes, and is seeking to speed up its move back. The Treasury Department is anxious a merger could dampen the US's competitive edge in wireless technologies, opening the door for China to lead in the sector.

The Committee on Foreign Investment in the United States has expressed concerns that a Broadcom takeover of Qualcomm would undermine USA efforts to stay ahead of China in the development of 5G tech.

In response to the letter, Broadcom said: "There can be no question that an American Broadcom-Qualcomm combination will provide far more resources for investments and development to that end".

Qualcomm, meanwhile, has accused Broadcom of "trivializing" national security. Microsoft and Google are concerned about the deal according to sources. "Then they buy them".

"It is not the 5G investment that the US government should be concerned about", said McGregor.

Intel has been watching the Qualcomm dealings play out with trepidation, according to The Journal's reports. "I would bet that's the most likely scenario at this point in time".

Broadcom was an Irvine-based fabless semiconductor company that was acquired in 2016 by Avago Technologies, a company that began life as a product division of Hewlett-Packard, and was later spun off in 1999 into Agilent Technologies.

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In this context, the Wall Street Journal said that Intel's plan is to block Broadcom from acquiring Qualcomm. On Friday, the company announced that it would move up a shareholder vote on the move to March 23 from May 6. However, the odds of the latter deal have come down recently as the two sides jockey for position and USA regulators have begun to get involved.

This is the fifth time a US president has blocked a deal based on CFIUS objections and the second deal Trump has stopped since assuming office slightly over a year ago. Broadcom aimed to win control of the board so it could advance with its hostile takeover.

The U.S. Treasury Department letter was "obviously a poison pill", Jim Lewis, a CFIUS expert at the Center for Strategic and International Studies, said before the Trump order.

A Broadcom acquisition is one of several alternatives Intel is considering if it appears Broadcom will succeed in taking over Qualcomm.

The presidential decision to block the deal can not be appealed.

Companies may challenge CFIUS's jurisdiction in court but may not challenge the inter-agency panel's national security findings, a CFIUS expert said.

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