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U.S. says Broadcom review confirms security concerns


(Reuters) - The U.S. Department told Singapore-based Ltd it confirmed some of its national security concerns about the chipmaker's unsolicited bid to buy rival , in an apparent attempt to block any deal before it is signed.

The Department also said in a letter to Broadcom, dated Sunday, that a final decision on any transaction agreed by the two companies could be made by U.S.

Qualcomm has rebuffed Broadcom's $117 billion takeover offer, which is under investigation by the in the (CFIUS), a multi-agency panel led by the Department that reviews national security implications when foreign entities take over U.S. corporations.

"(The) investigation has so far confirmed the national security concerns," the Department's letter to said, adding that the investigation would be completed soon.

"In the absence of information that changes CFIUS's assessment of the national security risks posed by this transaction, CFIUS would consider taking further action, including but not limited to referring the transaction to the for decision."

In November, Trump announced and applauded Broadcom's decision to move its headquarters to the United States, calling the company "one of the really great, great companies." He has not spoken about the matter recently.

In the Department's letter to Broadcom, top CFIUS official also said "took a series of actions in violation" of a March 4 order from the Department which required CFIUS to be notified five business days before taking any action toward moving back to the United States, where was founded.

Broadcom, incorporated in and co-headquartered there and in San Jose, California, denied this.

"Given Broadcom's public disclosures about the redomiciliation process since last November, as well as its to CFIUS, has been fully transparent with CFIUS about the redomiciliation process, and believes it is in full compliance with the March 4 interim order," the company said in a statement.

The Department letter was "obviously a poison pill," said Jim Lewis, a CFIUS expert at the Center for Strategic and International Studies, who described the communication to as "unprecedented."

"can change things by redomiciling," he said. "It's not clear what happens after that."

said on Monday it intends to complete the process of becoming a U.S. corporation by April 3, before any deal with Qualcomm would be agreed.

The Department's letter was addressed to lawyers for and Qualcomm, and was made public by Qualcomm. Qualcomm declined comment. The U.S. Department did not respond to a request for comment.

Shares of rose more than 3.5 percent on Monday while Qualcomm's stock edged lower.

Due to the CFIUS investigation, Qualcomm delayed by a month to April 5 its annual meeting, during which shareholders will vote on Broadcom's slate of six nominees to Qualcomm's 11-member board.

reported on Friday that Intel Corp's competitive concern about Broadcom's attempt to buy mobile chip rival Qualcomm had led it to consider a range of acquisitions in response, including a bid for Intel has played down the reported interest.

(Reporting by and in Washington; Supantha Mukherjee and Pushkala Aripaka in Bengaluru; Editing by Arun Koyyur, and Bill Rigby)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 03:12 IST