Broadcom Moves to Please US Government Also

Broadcom isn’t giving up on its quest to acquire Qualcomm despite the new hurdles that have cropped up this week. It’s no longer enough to win over Qualcomm shareholders, which they seem to have had a good shot at, but now they are facing skeptical regulators as well.

The CFIUS stepped into what had already become a messy hostile merger attempt and opened a review of the proposed deal. What they are worried about is a range of potential risks to national security from simply lower R&D leading to lower competitiveness of the US industry underlying its communications infrastructure to vulnerability to outside actors due to the fact that Broadcom is based in Singapore. Broadcom doesn’t think it’s a coincidence, but rather that Qualcomm used its clout to get the review going as part of its, umm, spirited defensive plans.

Meanwhile, Broadcom has already been planning to move itself to the US, and is now promising to create a $1.5B fund for R&D and the training of US engineers to maintain that competitiveness. Will that be enough? Who knows, so long as the whole thing doesn’t land on a particular xenophobic someone’s Twitter feed in the midst of a trade war.  Broadcom is known for its aggressive moves, but I’m not sure this one is going to work out.

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Categories: Government Regulations · Telecom Equipment