Broadcom's Qualcomm takeover plans pose national security risk, US Treasury says
The U.S. government considers there to be possible national security risks in Broadcom's proposed $117 billion acquistion of Qualcomm, enough to warrant a full-scale investigation, the U.S. Treasury's deputy assistant secretary for investment security said in a letter to the two Apple suppliers.
Specifically the government is concerned about Broadcom's connections with foreign parties, Aimen Mir wrote in the letter, seen by Reuters. He did not however explain who the parties might be.
The missive follows the Treasury's Committee on Foreign Investment (CFIUS) issuing an order for Qualcomm to delay a shareholders meeting 30 days. Broadcom is hoping to get six friendly nominees elected to Qualcomm's board of directors, paving the way for a hostile takeover.
One source told Reuters that CFIUS may be motivated by concerns in the U.S. military that if Broadcom buys Qualcomm, China's Huawei may indirectly be able to gain dominance in 5G cellular development. Huawei is known to have close ties to the Chinese government, which could in turn use control of 5G as a strategic advantage.
Apple depends on Qualcomm for cellular chips, but the two companies are also embroiled in a global legal battle over patents and royalties. A Broadcom buyout of Qualcomm could prove beneficial to Apple, both for the chance of ending lawsuits and possible supply deal benefits.
Broadcom is currently based in Singapore, but is in the process of relocating its corporate headquarters to the U.S.
Specifically the government is concerned about Broadcom's connections with foreign parties, Aimen Mir wrote in the letter, seen by Reuters. He did not however explain who the parties might be.
The missive follows the Treasury's Committee on Foreign Investment (CFIUS) issuing an order for Qualcomm to delay a shareholders meeting 30 days. Broadcom is hoping to get six friendly nominees elected to Qualcomm's board of directors, paving the way for a hostile takeover.
One source told Reuters that CFIUS may be motivated by concerns in the U.S. military that if Broadcom buys Qualcomm, China's Huawei may indirectly be able to gain dominance in 5G cellular development. Huawei is known to have close ties to the Chinese government, which could in turn use control of 5G as a strategic advantage.
Apple depends on Qualcomm for cellular chips, but the two companies are also embroiled in a global legal battle over patents and royalties. A Broadcom buyout of Qualcomm could prove beneficial to Apple, both for the chance of ending lawsuits and possible supply deal benefits.
Broadcom is currently based in Singapore, but is in the process of relocating its corporate headquarters to the U.S.
Comments
But, Qualcomm isn’t the only company working 5G...
Qualcomm can do it and will surely settled w Apple
"Huawei is known to have close ties to the Chinese government"
Huawei has always strongly denied any such ties so I don't know how it can be 'known' to have them.
In fact, it has been denying it since at least 2011.
What do you know about Huawei, just because the deny something does not make it false or true. Huawei existed long before china because more capitalistic, they were a government own and run business for a long time. Huawei, only exist to copy what other companies are doing in the world. They are one of the worse entities of stealing IP.
In that case, if another party claims that it is known that ties do exist that party should at least substantiate the claims.
Isn't that a reasonable position?
At the start of the decade I remember the same claims but when the committee in question was pressed to clarify, the reply was in the line of "while no wrongdoing was found..."
Of course that really means that nothing was actually 'known', simply 'feared'.
Because you like their phones?
Perhaps they did but I'm sure something could be plunked on the table to point that way if it were known.
You know what happened when they did that the last time? (Hint: “Chinese state secrets.”). Get real.
There’s a real blizzard coming, wait and see. There’s going to be a sweeping indictment of China and Chinese companies stealing intellectual property rights coming from this US Administration. It’ll make the steel/aluminum tariffs look like peanuts.
Stop the useless parsing of words. At this point, it is known. Period. 13 Russian nationals have been indicted.
-- Labor costs were too high
-- Management too inept (they spent on diversification rather than modernizing their plants)
-- Environmental controls too tight
They tried to save it with protective tariffs, but that effort failed...
The result was: Steel production moved to Japan (who supplied better, cheaper steel) and later into other (mostly Asian) countries...
It has to do with the formation of monopolies and ties to foreign governments that could harm our country
As Mike Pompeo the head of the CIA recently said: Even though Russia attacked this country in 2016 and plans to do so again in 2018, we should fear China even more...
Please try to keep up....