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U.S. says Broadcom violated order in process of moving domicile

Reuters 

(Reuters) - Chipmaker Ltd violated a Department order by not giving sufficient notice to a national security panel of its plans to redomicile in the United States, said in a letter to the Singapore-based company.

The Treasury's complaint potentially complicates Broadcom's unsolicited $117-billion offer to buy rival Qualcomm Inc, which is being reviewed by the in the (CFIUS) for potential national security threats.

Broadcom, incorporated in and co-headquartered there and in San Jose, California, is seeking to allay security concerns by becoming a U.S. corporation, a process which it said on Monday would be complete by April 3.

In a letter dated Sunday, Aimen Mir, a top CFIUS official, said that "took a series of actions in violation" of a March 5 order from which required CFIUS to be notified five business days before taking any action toward moving back to the United States, where was originally founded.

The letter was addressed to lawyers for Broadcom and Qualcomm, and was made public by Qualcomm.

The letter said that Broadcom took three such actions without giving proper notice to CFIUS, including working with a court to speed the process of redomiciling.

Broadcom denied the Treasury's complaint.

"Given Broadcom's public disclosures about the redomiciliation process since last November, as well as its to CFIUS, Broadcom 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.

Qualcomm, which has so far rejected Broadcom's offer to buy the company, declined comment. The did not respond to a request for comment.

CFIUS, which rarely looks at mergers before companies have clinched an agreement, also has confirmed national security concerns about a deal between in the two companies, the letter said.

"(The) investigation has so far confirmed the national security concerns," the letter said. "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 president for decision."

Broadcom's shares were up 3 percent to $261.59 on Monday morning while shares of Qualcomm were down less than 1 percent at $62.51.

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

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 12 2018. 20:52 IST
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