SAN FRANCISCO — Broadcom moved to assuage U.S. government concerns over its attempt to acquire rival Qualcomm, saying it was committed to investing to make the U.S. a global leader in 5G technology.
In an open letter to U.S. Congress posted Friday (March 9), Broadcom President and CEO Hock Tan said Broadcom was pledging to create a new $1.5 billion fund with a focus on innovation to train and educate the next generation of RF engineers in the U.S. Tan also said that Broadcom would not sell any critical national security assets to any foreign companies.
Broadcom is in the midst of an attempt to acquire Qualcomm for $117 billion, despite the fact that Qualcomm's board of directors has rejected that bid and others before it. Broadcom has nominated six nominees to Qualcomm's board of directors in a proxy fight that could determine the fate of the acquisition attempt.
Qualcomm stockholders were to elect board members this week, but the vote was pushed to April 5 after the Committee on Foreign Investment in the U.S. (CFIUS) — a multi-agency body that reviews potential acquisitions for national security risks — objected to the deal. CFIUS said in a letter dated March 5 that the acquisition could threaten the U.S. position in wireless communications standards, patents, and products — potentially to the benefit of China.
With the letter, CFIUS ordered Qualcomm to delay its proxy vote by at least 30 days.
In his later dated Friday, Tan called any notion that Broadcom would slash funding or cede leadership in 5G to another company unfounded.
"We have a proven track record of investing in and growing core franchises," Tan said. "In the case of 5G cellular, this will be 5G cellular."
Tan went on to say that Broadcom is "fully committed to making the United States the global leader in 5G by focusing resources and strengthening leadership in this area." He also promised that Broadcom would work closely with the U.S. government "as we drive to achieve and sustain this global leadership in 5G and beyond."
Qualcomm, meanwhile, announced that it eliminated the position of executive director of its board of directors. Jeffrey W. Henderson, a Qualcomm director since 2016, was promoted to independent chairman of the board.
Former Qualcomm CEO Paul Jacobs, who has held the position of executive chairman since he stepped down as CEO in 2014, remains on the board, Qualcomm said.
Tom Horton, lead director of Qualcomm's board, said in a press statement that the board "believes having an independent director as chairman at this important juncture in Qualcomm’s history is in the best interest of the company and our stockholders."
News sources:EET Times
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