That followed an unusual public statement last week, in which the committee said it advised against the US$117 billion mega bid for Qualcomm by Singapore-based Broadcom, pointing to risks of a third-party entity's advancement in 5G technology if the deal went through.
Broadcom's initial offer was tinged by politics, coming just after the company's chief executive, Hock Tan, appeared at the White House with Trump to announce plans to move the firm back to the United States from Singapore.
There is credible evidence, the order said, that through exercising control of Qualcomm, Broadcom "might take action that threatens to impair the national security of the United States".
In a letter to both companies' attorneys last week, the interagency panel said it was concerned that Broadcom's takeover would put at risk USA efforts to build next-generation wireless networks, thereby giving Chinese firms the opportunity to take the lead.
We knew that Broadcom's hostile takeover of Qualcomm was on thin ice, especially considering that the latter thought that the former's offers have greatly undervalued the company.
Washington's concern has been that a Broadcom takeover of Qualcomm would mean that America's only player in the 5G race would be eliminated through budget cutting, leaving China to monopolize a key technology standard for a generation. In the official executive order statement regarding the proposed takeover Trump has prohibited the takeover as well as prohibited any mergers, acquisitions, or takeovers that are deemed to be "substantially equal" in nature, which essentially means that no deal like this between the two companies will ever take place in the future either.
Broadcom's suit for Qualcomm always faced long odds.
Neither Broadcom nor Qualcomm immediately responded to requests for comment.
And several other technology deals fell apart, after CFIUS raised concerns. Only two companies in the world have the technological prowess today in this emerging standard: US -based Qualcomm and China-based Huawei.
Huawei has been forging closer commercial ties with big telecom operators across Europe and Asia, putting it in prime position to lead the global race for 5G networks despite US concerns.
But news came early Monday that the committee had already sent letters to both Broadcom and Qualcomm hinting that it was leaning toward recommending against the acquisition for national security reasons.
In the coming days or weeks after Broadcom's legal counsel has reviewed their options, we're bound to hear a more extensive response, so stay tuned. Once the move is done, Broadcom could argue that CFIUS does not have jurisdiction, the second expert said. Last September, he blocked the sale of Lattice Semiconductor Corp.to Canyon Bridge Capital Partners, which has ties to a fund owned by the Chinese government.
For its part, Qualcomm said Broadcom's claims were misleading.
Several analysts said the U.S. government is growing concerned that Huawei will develop such technologies nearly as fast as their American counterparts, narrowing the gap between Chinese and United States companies.
Senator Tom Cotton said that Qualcomm's work is too important to the US' national security to let it fall into the hands of a foreign company-and in a hostile takeover no less.
- American Idol tries for second act on new network
- Kerala bans trekking following Theni forest fire
- Trump rolling out big trade tariffs, sparing Canada, Mexico
- At least two teams willing to offer Kirk Cousins fully guaranteed deal
- Bangladesh plane carrying 67 passengers crashes in Nepal
- Browns LT Joe Thomas compares Tyrod Taylor to Russell Wilson
- Carragher apologizes for spitting at 14-year-old girl
- Broadcom aims to move to USA days before Qualcomm meeting
- East River helicopter crash kills five in New York City
- Manchester United don't need Paul Pogba: Liverpool game showed that - Craig Burley