Bo Tong speed up the move? MP: the high pass sale of foreign companies will make China's 5G preemptive
On March 7th, according to CNBC reports, the two foreign investment committee of the US Treasury Department (CFIUS) wrote letters to Broadcom's lawyers in March 5th, and explained their concerns about the deal. In the letter, CFIUS lists several issues, including the reputation of Broadcom's reduction in research spending, the common concerns of Microsoft and Google, and the possibility of reaching an agreement with the "third party foreign entities", which may threaten the risk of national security.
The law firm Brown Rudnick partners, focusing on CFIUS related transactions before CIA intelligence officer Guillermo Christensen (Guillermo Christensen) said, CFIUS is not yet announced to review There was no parallel in history. or agreed to trade initiatives are likely to stifle opportunities through the acquisition of high broadcom. Christensen said: "to achieve this agreement, Bo Tong must change a lot of business theory. It weakens the meaning of the agreement, and I don't think they are going to do it. "
It is expected that Bo Tong will not give up the deal, according to people familiar with the matter. Instead, it will try to answer any government questions about the deal, hoping to ease regulators' worries. People familiar with the matter also said that he was optimistic about the theoretical conclusion that the transaction will be approved by CFIUS within the next 28 days, when Qualcomm will hold a shareholder vote.
"We are fully cooperating with CFIUS to make the merged company a global leader in 5G and other technology fields," he said in an e-mail statement. There is no doubt that the United States Union High Qualcomm merger will provide more resources for investment and development. It is not in the long-term interest of the United States to delegate such a mission to the failed high pass management (lack of owner support, and due to continuous illegal activities resulting in excess cash flow).
The Qualcomm Corp declined to comment.
Two people familiar with the matter said that Broadcom's lawyers have been considering speeding up the relocation of headquarters before Qualcomm's vote, and transferring their legitimate business locations to Delaware. This means that high Qualcomm shareholders have become American companies before they vote on the acquisition.
The CFIUS review does not apply to domestic transactions, that is, the acquisition of another company by American companies. The headquarters of Bo Tong, which is currently in Singapore, has submitted a "move" Application in November 2nd last year.
But Christensen said that the delay in CFIUS's letters and Qualcomm shareholders' meeting was likely to cast a shadow over the efforts of Bo Tong's acquisition. He said the U. S. Treasury let CFIUS intervene in order to get the first step. The government will have to approve the move to migrate headquarters.
On the contrary, it may be temporarily forced to shelve the deal, first of all to become an American company. Chris Fujimori said, then, it would be necessary for Bon to put forward a new offer to Qualcomm shareholders to avoid CFIUS's review. He said: "Bon might offer a new offer on the grounds that 'we are not foreign buyers' and then start a war with CFIUS."
If he quit the deal, it might have a glimmer of hope. CFIUS preemptive judgement on the transaction will make Broadcom avoid paying the 8 billion dollar breakup fee of its commitment, which is to prevent regulators from blocking transactions. After understanding CFIUS's objections, it could move on if he found that it could not reach an agreement with the government.
According to the data from the US Treasury website, CFIUS investigated 79 transactions in 2016, including 5 transactions being abandoned for national security considerations, and 7 transactions were withdrawn for other reasons, including failure to meet regulatory process requirements. Semiconductor transactions are subject to a special review by CFIUS, as chips can store sensitive data that foreign governments may use in the United States.
Tom Cotton, a Republican senator from New York, issued a statement, which welcomed CFIUS's decision to postpone the vote of Qualcomm investors scheduled for today. This will enable shareholders to have four to six board members nominated by Tom.
"High - pass work is too important for our country's security," Cotton said. "It can't be allowed to fall into the hands of foreign companies, and hostile takeover is not possible. We have no reason to sell the leading computer chip manufacturers, allowing Chinese companies to take the lead in the competition for the development of 5G and next generation technology. The best way is to keep high Qualcomm in the hands of the United States and protect the national security of the United States.
Cotton spokesman also said, "we of course is the relocation of the headquarters of Broadcom has always been concerned about things, but the trade-off is too early in the process." Last year, the effort to migrate to headquarters was also related to its $6 billion 100 million acquisition of Brocade. According to the documents submitted, the Broadcom Corp must be re registered by November 17th to avoid the process of starting the "separation and stripping" of the Brocade SAN business.
