Broadcom president and CEO Hock Tan issued a letter to Congress this week in an effort to quell concerns that its unsolicited, proposed acquisition of Qualcomm could pose a national security threat while also pledging to make the U.S. “the global leader in 5G.”
The letter, released by Broadcom today (March 9), comes days after U.S. regulators stepped in to delay Qualcomm’s annual shareholder meeting, originally set for March 6, to give investigators time to determine if Broadcom’s play for the rival chipmaker would threaten national security. The U.S. Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) issued an interim order to Qualcomm to postpone the company’s annual stockholder meeting.
The meeting had been adjourned to April 5. Tied to its unsolicited bid for Qualcomm, Broadcom is attempting to elect six nominees to Qualcomm’s board.
Broadcom is based in Singapore, but announced last November that it is moving its headquarters back to the United States.
Broadcom said it would cooperate with the U.S. government on its investigation while stressing that it “will not sell any critical national security assets to any foreign companies,” and establishing a $1.5 billion fund focused on training and educating “the next generation of RF engineers in the United States.”
The company also said it wanted to “make it clear that Broadcom is today in every important respect an American company,” noting that it’s “built on the roots” of several U.S. tech companies, including HP, AT&T, and Brocade Communications, and led by an exec team and board made up of nearly all U.S. citizens, with more than half its total workforce based in the U.S.
Qualcomm recently provided Broadcom a “mark-up” to the Broadcom proposal that, Qualcomm believes, could resolve all of the issues, save for the price, which it believes continues to undervalue Qualcomm.
There’s also a massive disagreement on who knew what and when with respect to Qualcomm’s filing with CFIUS.
Broadcom originally Qualcomm filed it in secret, without Broadcom’s knowledge, and Qualcomm countered that Broadcom’s claim had “no basis in fact,” as Broadcom had been interacting with CFIUS for weeks.
Broadcom then reiterated its position that Qualcomm failed to disclose to its stockholder and to Broadcom about the request for CFIUS review on January 29.