Not So Fast, Broadcom. Washington Wants a Word: DealBook Briefing

Good Monday morning. Here’s what we’re watching:

• S.&P. 500 futures are down amid tariff threats and Italy’s election results.

• How Washington intervened in Broadcom’s bid for Qualcomm.

• The school protection industry is seeing business get busier.

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The most dramatic story in M.&A. has taken another twist — one that raises questions about how assertively the Trump administration will regulate deal-making.

What happened: The U.S. government panel that reviews deals for national security concerns, known as Cfius, has asked Qualcomm to postpone its shareholder meeting, scheduled for tomorrow, by 30 days so it could further review Broadcom’s hostile takeover bid.

Broadcom’s response pulled no punches, accusing Qualcomm of covertly reaching out to regulators:

Why: Members of Cfius have asked whether the takeover could put the U.S. behind China in the race for 5G wireless technology. Qualcomm’s biggest rival in the space is Huawei, and Qualcomm has argued that Broadcom, a serial acquirer and noted cost-cutter, could hurt crucial 5G research and development. (And Michael noted on Friday that there’s more to it than that.)

Where the vote stands: Many early votes favored Broadcom: The shareholder advisory firms I.S.S. and Glass, Lewis recommended giving it at least four seats. But a top-30 investor, Parnassus, had said it supported Qualcomm. Michael hears that both sides have been especially focused on lobbying the biggest shareholders, BlackRock and Vanguard.

The bigger picture: The White House has already blocked the sale of a U.S. tech company to a Chinese buyer on national security grounds. If it steps in here — in an unusually aggressive move by Cfius, which normally acts after a proposed deal is filed for review — would deal makers lose heart?

The deals flyaround

• Axa of France agreed to buy the XL Group, a reinsurer, for $15.3 billion in cash — the biggest takeover of a U.S. insurer by a European one. (Axa)

• Cybersecurity due diligence is rising up acquirers’ M.&A. checklists. (WSJ)

• Siemens is forging ahead with an I.P.O. of its health care unit, Healthineers, that could value it at as much as $38 billion. (Bloomberg)


Today’s DealBook Briefing was written by Andrew Ross Sorkin on the road, and Michael J. de la Merced and Amie Tsang in London.


White House officials like Commerce Secretary Wilbur Ross and senior trade adviser Peter Navarro asserted on the Sunday talk shows that tariffs on steel and aluminum are definitely coming — though they didn’t say when.

And the move may affect more than raw metal either: Mr. Trump threatened tariffs on cars imported from the E.U. if it retaliates. (He didn’t mention the ones that Daimler and BMW make in G.O.P.-leaning Southern states.)

Big question 1: How will China react? So far, it has been cautious, in part because Chinese steel makes up just 2 percent of American steel imports. U.S. allies who stand to be hit have been far more outspoken.

Big question 2: Will Gary Cohn, who favors free trade but was shot down at a meeting on Thursday, finally leave the White House?

The tariffs flyaround

• The WSJ editorial board says steel and aluminum jobs will not return, because they were destroyed by productivity gains, not imports. (WSJ)

• How tariffs divide blue-collar America. (NYT)

• What they could do to the cost of Mr. Trump’s infrastructure proposal. (WSJ)

• Carl Icahn sold 26 percent of his stake in Manitowoc, a crane manufacturer that uses plenty of steel, before the Commerce Department recommended new tariffs. (FT)

In the wake of the Parkland school shooting, companies have been rushing to sell security products from metal detectors and remote-locking doors to body armor to threat-parsing Twitter bots.

More from Tiffany Hsu of the NYT:

A fintech company makes a stand: Kabbage, a small-business lender that counts SoftBank and UPS as investors, said this morning that it won’t work with companies that sell guns to those under 21 or make or sell assault-style rifles.

Elsewhere in guns: Why the AR-15 became “America’s rifle.” How Goldman Sachs is tied to a major gun seller, Bass Pro Shops. Why some pension funds hesitate to sell gun company holdings, and why it’s hard for Florida to pass gun control laws.

• Robert Mueller is investigating George Nader, a Lebanese-American businessman and adviser to the U.A.E. The special counsel has also subpoenaed at least one witness for all communications regarding 10 people, including President Trump, Steve Bannon and the former campaign adviser Carter Page.

• The State Department has yet to spend any of the $120 million it has been allocated since late 2016 to counter foreign meddling in U.S. elections. (NYT)

• How European leaders are responding to the possibility that President Xi Jinping of China may threaten the global system, rather than defend it. (NYT)

• Mr. Trump is seeking to block federal funding for new rail tunnels under the Hudson River as part of a feud with Chuck Schumer. (NYT)

• A businessman who recently purchased a majority stake in the only Trump hotel in Latin America wants to push the Trump family out — but they’re refusing to go. (NYT)

They’re arguing that an exemption in the way regulators calculate the overall riskiness of banks’ portfolios — known as the supplemental leverage ratio — should apply to them as well as to custody banks like Bank of New York Mellon and State Street.

More from Emily Flitter, Ken Vogel and Alan Rappeport of the NYT:

Elsewhere in financial services: How Greg Fleming plans to reshape the Rockefellers’ personal fortune into the next investment giant.

In: Benchmark, Sequoia Partners and Kleiner Perkins.

Out: Veteran virtual currency investors like Union Square Ventures, Andreessen Horowitz and Polychain Capital.

Why: Telegram’s promises to fix the problems with initial coin offerings sound nebulous to many investors at the moment. “It’s a pitch that sounds good to V.C.s that haven’t participated but makes no sense to people that have been in the space,” Nick Tomaino of the investment fund 1confirmation told the NYT.

The tech flyaround

• Uber took billions of dollars from SoftBank. Now it must fight the other ride-hailing companies that the Japanese conglomerate owns stakes in. (WSJ)

• Exchanges remain a weak point for the virtual currency ecosystem. (WSJ)

• Thanks to “deepfake” video technology that puts one person’s face on another’s body, our columnist Kevin Roose can become Ryan Gosling, sort of. (NYT)

• Silicon Valley is over, says Silicon Valley, as V.C.s tour the Midwest. (NYT)

• Back in the Bay Area, professionals are moving into dorms. (NYT)

• The Academy Awards became a mini-Super Bowl: a showcase for major ad spots. Twitter, for instance, rolled out an ad about female empowerment and the hashtag #HereWeAre.

• Here’s how the Oscars addressed the age of #MeToo. And an explainer of the “inclusion rider” that Frances McDormand mentioned in her acceptance speech for Best Actress.

• A co-founder of the V.C. firm General Catalyst won an Oscar, Dan Primack of Axios pointed out: David Fialkow, who was a producer of the Netflix documentary “Icarus.” (@danprimack)

• All the winners from last night. (NYT)

• Index Ventures has hired Sarah Cannon from Alphabet’s CapitalG as its first woman partner in the U.S. (Recode)

• Albertsons and Rite Aid named Jim Donald, the former Starbucks C.E.O., as the president and chief operating officer of their newly combined company. (WSJ)

• Reducing the gender pay gap would have large economic benefits, according to PricewaterhouseCoopers: If all O.E.C.D. matched Sweden on this, it could increase gross domestic product by $6 trillion. (Bloomberg)

• The chief executive of Credit Suisse has written to a woman who made a sexual harassment complaint in 2010 to promise a “thorough review” of how the bank handled it. (FT)

• Buyout bosses are taking on more risk, paying record prices for assets and taking on debt at levels close to the peaks of a decade ago. (FT)

• Bacardi is reviving an old promotional technique: sending its employees into bars. (NYT)

• Phillip Picardi, a former intern who now leads Teen Vogue, could be the future of Condé Nast. (NYT)

• A former LVMH executive is planning a fashion hub in his home city of Detroit. (NYT)

• Berkshire Hathaway’s real estate brokerage network is adding its first international franchisee, in Berlin. (WSJ)

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