U.S. Government is investigating Broadcom’s proposed acquisition of Qualcomm
Broadcom and Qualcomm have been going back and forth as the former is attempting to make an acquisition deal for the latter. The initial offer was immediately declined by Qualcomm’s board of directors. They felt the asking price was an insult to the company and didn’t reflect how much it was truly worth. Broadcom offered a better deal but it was declined again as the folks at Qualcomm didn’t feel their talents and assets were appreciated. Now it looks like there’s another hurdle that Broadcom has to clear. The U.S. Government is investigating the acquisition offers.
The situation has actually gotten pretty cutthroat as of late. Broadcom has offered Qualcomm multiple bids and they’ve been turned down each time. They have even turned toward a takeover attempt of Qualcomm. While this certainly wouldn’t be an easy feat, it isn’t out of the range of possibility. However, both Google and Microsoft have stepped forward claiming this acquisition would stifle innovation within the smartphone SoC market.
A new report states the U.S. government has ordered a national security review of Broadcom’s now $117 billion bid for Qualcomm. This shouldn’t be a surprise since Qualcomm has been under attack by multiple governments for antitrust violations, and they are currently in the middle of multiple lawsuits against Apple. This move from the U.S. government is two-fold as the country has growing concerns about safeguarding semiconductor technology while also feeling doubtful about the success of this acquisition.
This new investigation comes from the Committee on Foreign Investment in the United States (CFIUS). Their job is to review deals for potential national security concerns. The situation is reminiscent of how U.S. politicians are worried about Huawei phones being sold by carriers in the country. Some unnamed members of Congress and FCC officials are concerned that Broadcom could sell part of Qualcomm to a Chinese firm.
The CFIUS rarely reviews mergers before companies have agreed to a deal, so it’s surprising that they have stepped in so early in this deal.