Broadcom’s acquisition of Qualcomm may be in trouble from an unexpected source. There was a possibility that the shareholder meeting (which was scheduled for today) would scoff at the new, lower price or that antitrust authorities would object to this concentration of Wi-Fi tech (remember: Qualcomm is in the process of absorbing NXP). But no, it’s the Committee on Foreign Investment in the United States (CFIUS) that caused the shareholder meeting to be delayed by 30 days.
Perhaps it’s not that surprising, the US has been pretty negative towards foreign companies lately. And while Broadcom was founded in the US, it is currently owned by a Singaporean company (the Qualcomm deal was allegedly a way back to the US).
Anyway, CFIUS rarely gets involved before a deal is signed – Broadcom and Qualcomm are still negotiating. “This measure will afford CFIUS the ability to investigate fully Broadcom’s proposed acquisition of Qualcomm,” the U.S. Treasury Department stated.
Qualcomm is one of the leading players in the build-up to 5G networks (in partnership with Nokia), Huawei is the main competitor. A source familiar with CFIUS says that if the deal goes through, there may be no other option for American carriers than to rely on Huawei. There’s always the possibility that Broadcom will sell off parts of Qualcomm after the acquisition.
Broadcom claims its board and senior management is almost entirely American and that both it and Qualcomm are owned by the same US institutional investors. Still, the deal can’t go on without an okay from CFIUS (and later other regulatory bodies will get involved too).