CALIFORNIA: A US national security panel has ordered Singapore-based chipmaker Broadcom to provide it with five business days’ notice before taking any action towards redomiciling to the United States, a regulatory filing this week revealed.
The previously undisclosed requirement shows that the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign acquisitions of US companies for potential national security risks, is aware that its jurisdiction could be contested if Broadcom redomiciles to the United States.
The panel on Sunday ordered San Diego-based Qualcomm Inc to postpone its shareholder meeting by 30 days so it could investigate Broadcom’s $117 billion hostile bid for Qualcomm.
Lawyers that specialize in advising companies on CFIUS matters have been debating this week whether Broadcom’s bid would be subject to a CFIUS review once it redomiciles.
“It is not entirely clear how establishing a US domicile would affect CFIUS’ view of its jurisdiction over the proposed transaction,” Kirkland & Ellis LLP, a US law firm not involved in the matter, wrote in a note to clients on Friday.
“CFIUS’ determination as to whether an entity is considered ‘foreign’ is nuanced and not prescriptive, and encompasses considerations that include a facts and circumstances assessment of ownership and formal and informal mechanisms of control,” the Kirkland lawyers wrote.
Broadcom said on Friday it expected to complete its move to the United States by May 6. It disclosed it had petitioned a Singapore court on March 9 to order the convening of a special shareholder meeting to approve the redomiciliation. — Reuters
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