Broadcom says to stick with U.S. 5G investment after Qualcomm deal

A sign to the campus offices of chip maker Broadcom Ltd who announced on Monday an unsolicited bid to buy peer Qualcomm Inc for $103 billion is shown in Irvine California

Broadcom says to stick with U.S. 5G investment after Qualcomm deal

"Broadcom is committed to making the USA the global leader in 5G", the company said in a statement. In addition, Broadcom will not sell any critical national security assets to any foreign companies. Any dispositions of the assets to foreign purchasers would be subject to CFIUS review.

The US government stepped in and stopped the deal over major concerns regarding national security, and now Broadcom is sweetening the deal with a $1.5 billion fund that would train new American engineers. The underlying theme of Broadcom's pitch to Congress is that it will make every effort to ensure the United States leads the way in wireless technologies, today and in the future.

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Broadcom said, "The bottom line is that a combined, American Broadcom-Qualcomm will be a more focused and stronger champion for sustained United States leadership in 5G than a standalone Qualcomm, an outcome that strongly supports America's national security interests".

Broadcom's statements indicate that it is looking to take a "private equity'-style direction if it acquired Qualcomm which means reducing long-term investment, such as R&D, and focusing on short term profitability".

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Qualcomm has been the self-proclaimed leader in all things 5G connectivity.

"Importantly, Broadcom will fund enhanced R&D through lawful business practices rather than predatory and anticompetitive behavior", the statement reads.

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Separately, Qualcomm Inc QCOM.O said it discontinued the role of executive chairman and named a new non-executive chairman as it seeks to curry favor with shareholders ahead of a proxy fight with Broadcom now slated for April 5. Qualcomm's argument of its anticompetitive licensing practices needing to fund a robust R&D effort has no truth. More than half of Broadcom's total workforce is in the United States, across more than 25 states, including Texas, Colorado, California and Pennsylvania. Currently, it is in the finale of redomiciling to the USA and as expected the process would be completed by 6th May 2018. FT continues: "Cfius took issue with Broadcom's "private equity-style" plans, which it wrote could lead to a reduction in Qualcomm's large research and development budget in favour of "short-term profitability".

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