Chip maker Broadcom has announced plans to move its operations to the US, a process known as redomiciliation, in a shift which could give it the means to work around the presidential order banning it form acquiring larger rival Qualcomm.
Broadcom has been after Qualcomm, a rival roughly double its size, since offering up an unsolicited near-£100 billion offer late last year. The offer was quickly rejected by Qualcomm, but Broadcom head Hock Tan refused to take no for an answer and kicked off a hostile takeover attempt. Qualcomm, naturally, was unimpressed, though its response to a revised acquisition offer left wiggle room for negotiation before the whole deal was blown up by a presidential order banning any acquisition signed by US President Donald Trump earlier this month.
While Broadcom indicated that it was, indeed, killing any plans to acquire Qualcomm, it appears that the company may still be looking for loopholes - starting with a plan to redomicile itself in the US, thus torpedoing President Trump's stated concerns with a US company being acquired by a foreign entity.
Broadcom confirmed the redomiciliation plan late last week in a statement to investors, announcing that over 99 percent of votes cast by shareholders were in favour of a move to the US. Said move, which takes the company out of its home nation of Singapore, will be completed extremely rapidly: By opening of trading on April 5th, Broadcom will be a US company, providing the High Court of the Republic of Singapore grants its approval.
Broadcom has not officially stated whether the redomiciliation is related to its attempts at acquiring Qualcomm.
September 18 2020 | 18:30