A secretive US national security committee has issued an unusual public warning against Broadcom’s proposed $142bn hostile takeover of San Diego-based Qualcomm, saying a deal might lead to China overtaking the US in critical 5G technology.
The letter from the Committee on Foreign Investment in the US (Cfius), which can block foreign takeovers of American companies, is an unprecedented case of the normally publicity-shy regulator pre-empting a negotiation to protect US technology from Chinese competition. The move comes only days after President Donald Trump invoked a cold war national security statute to justify tariffs on steel and aluminium.
In its letter to the companies, Cfius criticised Singapore-based Broadcom’s “private equity-style” plans for Qualcomm, saying it would reduce long-term investment in research and development in search of quick profits.