A high-level federal government committee investigating Singapore-based Broadcom‘s attempt to acquire Qualcomm hinted in a letter released Monday that it may block the hostile takeover.
The Treasury Department’s Committee on Foreign Investment in the United States said in the letter dated Sunday that its investigation had identified legitimate national security risks.
“That investigation has so far confirmed the national security concerns that CFIUS identified to you in its letter on March 5, 2018. That investigation is expected to close soon,” wrote Aimen N. Mir, deputy assistant secretary for investment security.
The letter was released by Qualcomm hours after Broadcom announced it has accelerated its return to the United States from Singapore and expects to become a U.S. company before the Qualcomm shareholders meeting on April 5.
The meeting was postponed from March 6 pending the CFIUS national security review of Broadcom’s $79 per share, $100 billion-plus hostile bid to acquire the San Diego wireless pioneer.
“U.S. national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation,” which is expected by April 3, Broadcom said in a statement before financial markets opened.
Broadcom’s CEO, Hock Tan, is a U.S. citizen, and the company said that it is “in all important respects a U.S. company.” The company’s U.S. headquarters will be in San Jose in Silicon Valley.
At the Qualcomm meeting, Broadcom will seek to elect a new slate of directors that will vote to proceed with the acquisition.
Qualcomm stock was trading at $63 on Monday morning, little changed from the Friday close. Broadcom was trading near $263, up over 3 percent.
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