A sign to the campus offices of chip maker Broadcom, who announced on Monday an unsolicited bid to buy peer Qualcomm for $103 billion, is shown in Irvine, California, US, November 6, 2017.
PHOTO: REUTERS
A US government panel, in an unusual move, stepped into Singapore-based Broadcom’s hostile takeover bid for Qualcomm this week, citing a number of concerns around the development of the next generation of mobile networks and technology.
Qualcomm deals blow to Broadcom's bid with sweetened NXP deal
The Committee on Foreign Investment in the United States (CFIUS) delayed a shareholder meeting that had threatened to hand Broadcom control of the Qualcomm board and, among other things, said lower R&D spending would weaken US-based Qualcomm against Chinese companies.
It said that Broadcom’s recent statements and its history in other buyouts suggested the heavily-leveraged $117 billion bid for Qualcomm would lead to such a reduction in investment in favor of short-term profits.
“Broadcom will not only maintain the R&D resources Qualcomm devotes to 5G and innovation in future wireless standards – we will also focus R&D spend to those critical technologies that are essential to the US,” Broadcom said on Wednesday.
Qualcomm rejects Broadcom's revised buyout offer, proposes meeting
The statement also promised to create a $1.5 billion fund with a focus on innovation to train and educate the next generation of US engineers to ensure the country’s lead in future wireless technology.
Qualcomm could not immediately be reached for comment.
Shares of Qualcomm and Broadcom were marginally down in trading before the bell.
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