A government panel reviewing Broadcom’s $117 billion bid for Qualcomm has warned that it may refer the potential deal to President Trump for rejection, further dimming the prospects for what would be the biggest-ever technology takeover in history.
In a letter to the two companies on Sunday, the panel, the Committee on Foreign Investment in the United States, said that it believed the offer by Broadcom posed national security concerns. Broadcom is currently headquartered in Singapore, but is in the process of relocating its legal base to the United States to allay those issues.
The threat by the panel, known as Cfius, could stop Broadcom’s monthslong quest to buy its fellow chip maker in its tracks. Cfius already ordered a one-month delay of Qualcomm’s annual shareholder meeting, where Broadcom had been expected to win at least some seats on Qualcomm’s board, if not a majority.
Under Mr. Trump, several deals involving foreign buyers have been squelched after a Cfius review, including Moneygram’s sale to an affiliate of the Alibaba Group and Lattice Semiconductor’s sale to an investment firm with reported ties to the Chinese government.
Broadcom has been eager to speed up the process of bringing its headquarters back to the United States — known as redomiciliation — to address national security concerns about its campaign. On Friday, the company announced that it would move up a shareholder vote on the move to March 23 from May 6. That would let Broadcom redomicile by April 3, ahead of Qualcomm’s rescheduled shareholder meeting.
But in its letter on Sunday, Cfius said that it believed Broadcom had violated the panel’s order by moving up its redomiciliation date without enough consultation with the government.
In a statement, Broadcom said that its $117 billion plan to buy Qualcomm was always contingent on relocating its headquarters. The company added that it had been open with the government about its plans to relocate, both in announcements since November and in discussions with Cfius.