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Broadcom's Planned Move To U.S. The Latest In Qualcomm Bid Drama

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Broadcom's Planned Move To U.S. The Latest In Qualcomm Bid Drama
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The ongoing saga of Broadcom Ltd (NASDAQ: AVGO)'s attempt to acquire QUALCOMM, Inc. (NASDAQ: QCOM) has become more complicated and now includes a new player: industry titan Intel Corporation (NASDAQ: INTC)

What Happened On Friday

The combination of Broadcom and Qualcomm could result in Intel being completely left out of Apple Inc. (NASDAQ: AAPL)'s ecosystem. Intel isn't sitting quietly on the sidelines; the Santa Clara, California-based chipmaker would consider a bid to acquire Broadcom, according to The Wall Street Journal.

A Broadcom-Qualcomm combination would also impede Intel's two growth areas, data center and automotive, the Journal story said. The merger would give Broadcom and Qualcomm greater exposure to the data center segment, and Qualcomm's own proposed purchase of NXP Semiconductors NV (NASDAQ: NXPI) would give it a better competitive presence in the automotive market.

What Happened On Monday

The U.S. government issued a warning to Broadcom on Monday, CNBC's David Faber reported.

The government's warning focuses on Broadcom's move to relocate its headquarters from Singapore to the United States, for which the the Committee on Foreign Investment in the U.S. said it did not receive sufficient notice.

The company argued that its move to redomicile to the U.S. has been "a matter of public record since last November" and follows CEO Hock Tan's visit with President Donald Trump Nov. 2. 

What's Next

Broadcom is meeting with CFIUS Monday in an attempt to satisfy the agency's questions and prevent a referral of the deal to Trump, according to CNBC. 

If Broadcom moves its headquarters before an investigation is finalized, CFIUS could potentially lose any jurisdiction it has in evaluating the deal, the report said. 

Related Links:

Why Qualcomm's Takeover Bid By Broadcom Raises Security Concern

Nomura: Qualcomm Has 'Gun To Its Head' With Broadcom's Hostile Takeover Attempt

Posted-In: Apple Ecosystem CFIUS CNBC David Faber MergersNews M&A Media Best of Benzinga

 

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