A split appears to have developed within the Trump administration over whether a federal committee that reviews the national security implications of foreign investments should get involved in Broadcom's hostile takeover attempt to acquire Qualcomm.
The Committee on Foreign Investments in the United States, known as CFIUS, held a meeting Tuesday in Washington and according to a report in the Wall Street Journal, Treasury Secretary Steve Mnuchin said he wasn't sure if the committee had jurisdiction over Broadcom's bid for the San Diego-based chipmaker. CFIUS is made up of 14 federal departments and agencies and is chaired by the Secretary of the Treasury.
By contrast, representatives of the Justice Department, Homeland Security, Defense and Energy called for CFIUS to get involved, the report said, citing concerns a Broadcom acquisition may lead to critical pieces of Qualcomm being sold off. That, the agency representatives warned, could result in the U.S. falling behind China when it comes to developing cutting-edge advancements in the tech sector, which could pose security risks.
Broadcom's $117 billion bid -- the largest ever in the semiconductor industry -- may put the Trump administration in a ticklish position. Last November, Broadcom CEO Hock Tan announced at a media event at the White House that he would move the company to the U.S.
"We are making America home again," Tan said, with Trump standing in the background.
While Broadcom's U.S. headquarters is located in San Jose, its legal domicile is Singapore.
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But a review by CFIUS could jeopardize Broadcom's bid to place six directors on Qualcomm's 11-seat board. Qualcomm's shareholders will vote for either its existing board or the six alternative candidates put forth by Broadcom at Qualcomm's annual meeting March 6.
Early Thursday evening, Rep. Duncan Hunter, R-Alpine, called on Defense Secretary James Mattis to get personally involved.
"As Secretary you have the ability, at this moment, to ensure America's security for a generation by protecting against a takeover of American technology that would do nothing short of crippling our defense against China," Hunter said in a letter to Mattis,
"I respectfully request that your personally advocate for CFIUS to act quickly and block any action on this sale pending a full security review and investigation."