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Broadcom aims to move to USA days before Qualcomm meeting

12 Mars 2018

Singapore-based Broadcom Ltd said on Monday it expects to complete the process of redomiciling to the United States by April 3.

If Broadcom was successful in its bid to acquire Qualcomm, the combined company would have a valuation of around $220bn, closing in on Intel's $245m, which means the combined company would pose a much bigger threat to Intel in the chip market. There is real doubt cast on any deal at any price because the US government is going to scrutinize the deal over potential national security issues due to foreign investment.

The Wall Street Journal on Friday reported that Intel was considering such a bid as one of several options in response to Broadcom's hostile bid for Qualcomm Inc. Broadcom's now market value stands at around $104 billion. Broadcom really wants to buy Qualcomm and merge the two coms into one company.

The letter, which was dated Sunday, said that Broadcom "took a series of actions in violation" of a previous order from Treasury.

The Qualcomm news is significant because it signals that the company's board is trying to make an independent decision in regard to the merger.

Namely, Broadcom was supposed to inform the CFIUS five business days before making any moves to bring its headquarters back to its original home in the US.

"It is not entirely clear how establishing a USA domicile would affect CFIUS' view of its jurisdiction over the proposed transaction", Kirkland & Ellis LLP, a United States law firm not involved in the matter, wrote in a note to clients on Friday.

That meeting is to be held on March 23, the company said. The Singapore Court will then have to greenlight the redomiciliation.

Broadcom and Qualcomm's acquisition dance has been underway for some time now. CFIUS, which is led by Treasury, has ordered Broadcom to submit information to the panel by noon Monday ahead of a meeting between CFIUS officials and Broadcom Chief Executive Officer Hock Tan, its general counsel and chief technology officer, according to the letter. Broadcom hopes to replace the majority of the board's members to help it succeed in its acquisition attempt, while Qualcomm has made moves to maintain its board's independence.

During a public ceremony at the White House on November 2, Broadcom CEO Hock Tan announced to President Donald Trump and others that he would be moving his company to the U.S. The announcement came as CFIUS was reviewing another merger proposal: Broadcom's bid to purchase Brocade Communications Systems.

Broadcom aims to move to USA days before Qualcomm meeting