In the latest twist in a high-stakes semiconductor industry takeover battle, Qualcomm has delayed its annual meeting scheduled for Tuesday, where shareholders could have endorsed Broadcom’s $117 billion offer.
Qualcomm’s decision to delay the meeting until April 5 came in response to an order from a U.S. government committee that is reviewing the proposed takeover. The Committee on Foreign Investment in the United States (CFIUS) directed Qualcomm to postpone the meeting for 30 days.
The bid by Singapore-based Broadcom has fueled concerns that the United States is giving up an edge in areas like technology, as China and other countries gain ground.
“In compliance with the CFIUS order, Qualcomm will delay its annual meeting of stockholders and election of directors for at least 30 days so that CFIUS can fully investigate Broadcom Limited’s proposal to acquire Qualcomm,” the company said.
Broadcom accused Qualcomm of secretly filing a voluntary request with CFIUS to initiate an investigation. It called the delay “a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom’s independent director nominees.”
But Qualcomm, in a press statement, said “Broadcom’s claims that the CFIUS inquiry was a surprise to them has no basis in fact” and that Broadcom had been interacting with CFIUS “for weeks.”
As Fortune reports, Qualcomm shareholders would have been able to vote on the replacement of six Qualcomm board members with Broadcom’s nominees and the election of Broadcom’s slate “would effectively be an endorsement of the takeover.”
Broadcom most recently offered $79 per share, or $117 billion, for Qualcomm, lowering its previous bid of $82 per share, or $121 billion, after Qualcomm raised its own takeover bid for NXP Semiconductors.
CFIUS’ intervention “represents a newly aggressive posture by the [Trump] administration to protect national corporate champions and scrutinize acquisitions by overseas companies,” The New York Times said, noting that the secretive committee recently blocked proposed acquisitions by MoneyGram and Lattice Semiconductor.
U.S. officials told Reuters that members of Congress were concerned that Broadcom could sell part of Qualcomm to a Chinese firm.
“Qualcomm’s work is too important to our national security to let it fall into the hands of a foreign company — and in a hostile takeover, no less,” said Sen. Tom Cotton (R-Ark.) “I would like to see CFIUS more active especially regarding China and regarding critical industries.”