Hoping to avoid a prolonged national security review, Singapore-based Broadcom said it will move its international headquarters back to the U.S. by April 3 as it continues a hostile takeover bid for rival Qualcomm. In a press release today, Broadcom confirmed the date for the first time while also emphasizing its roots in the U.S. Indeed, the whole snarled mess surrounding the notion of a foreign company buying a prize like Qualcomm goes right to the heart of what one means by U.S. company. Politicians are worried by the thought of an Asia-based company seizing control of Qualcomm, which is emerging as a leader in next-generation 5G chips. Qualcomms board has fought the bid since last November even as Broadcom raised the price to $121 billion. Last week, the U.S. Treasurys Committee on Foreign Investment in the United States (CFIUS) released a letter saying it was reviewing the transaction for national security risks, putting the deal temporarily on hold. This was not entirely surprising and was one of the reasons Broadcom announced at a ceremony with President Trump last November that it plans to relocate to the U.S. The company said in its press release today that it supports the CFIUS process and noted that the agency had previously reviewed and cleared its acquisition of Brocade in November 2017. At the close of that transaction, Broadcom agreed to relocate. The move to the U.S. will be a homecoming for a company that in many ways never really left. Broadcom began life in Irvine, California as a fabless semiconductor company. It was acquired in 2016 by Avago Technologies, which started as a product division of Hewlett-Packard and was spun off in 1999 into Agilent Technologies. After that deal, Avago renamed itself Broadcom and established joint headquarters in Singapore and San Jose. In many ways, what Broadcom refers to as a plan to redomicile to the U.S. is a largely symbolic move. The company hasnt said how many executives or what, if any, operations may be shifted. But it emphasized that it believes the change should eliminate any fears around national security. In short, U.S. national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation, the company said. Whether that does actually satisfy the CFIUS remains to be seen. Meanwhile, amid delays in reaching a deal, rumors have emerged that rival Intel is considering making a bid for Broadcom.
It might be over just like that. Broadcom's hopes of acquiring Qualcomm might have been quashed for good. President Trump has issued an order blocking Broadcom's proposed takeover and anything "substantially equivalent" to it over concerns that it might "impair the national security" of the country. The order also disqualifies all 15 of Broadcom's proposed directors for Qualcomm. The move follows a letter from the Committee on Foreign Investment in the US warning the companies that it believed the takeover would pose too great a security risk. If Broadcom bought Qualcomm, CFIUS argued, it would likely cut costs at the American company and weaken its ability to compete against Chinese rivals like Huawei. That, in turn, would let China dominate 5G wireless and leave Americans vulnerable. CFIUS also said that Broadcom defied an interim order requiring that it give a panel 5 business days' notice before it took steps to officially relocate to the US. We've asked both Broadcom and Qualcomm for comment, although Broadcom had previously said it was in "full compliance" with the temporary order. To put it mildly, things aren't looking good for Broadcom. There was a chance it could have escaped CFIUS' scrutiny by claiming that the takeover fell outside of its jurisdiction, but that opportunity is gone now -- as long as Trump's order holds, the deal is off. While Qualcomm isn't likely to complain much given that it repeatedly rejected Broadcom's bids as undervalued, Broadcom now faces the prospect of having to either look at another acquisition target or accept that it will have to tackle 5G by itself. Update: Not surprisingly, Broadcom said it's "reviewing" the order and "strongly disagrees" that its would-be acquisition poses national security risks. Qualcomm noted that it received the Order, and said it will reconvence its annual stockholders meeting on March 23rd.