The Broadcom Ltd. logo outside the company's headquarters in Singapore. If Broadcom’s shareholders approve plan to become a U.S.-based company, it potentially could argue that a U.S. panel doesn’t have jurisdiction to review its bid for Qualcomm Inc. Photo: Ore Huiying/Bloomberg News
Kate O’Keeffe and
Singapore-based Broadcom Ltd. AVGO -0.99% said Friday it will ask shareholders to vote on March 23 to approve its plan to redomicile to the U.S., potentially setting the stage for a showdown with the U.S. national security panel reviewing its $117 billion hostile bid for Qualcomm Inc. QCOM -2.17%
The vote is now set to take place in the middle of a review of the proposed bid by the Committee on Foreign Investment in the U.S., known as CFIUS, a multiagency panel that reviews foreign deals and can advise the president to block them on national security grounds.
If Broadcom were considered a U.S. company, it could argue that its deal falls outside of the panel’s jurisdiction. CFIUS, though, could say it still has jurisdiction to review the bid since it began the review while Broadcom was a Singapore company.
Qualcomm shareholders had been set to vote earlier this week on whether to replace six of the company’s 11 directors with nominees put forward by Broadcom, a result that could have paved the way for the takeover.
Instead, in a surprise move late Sunday night, CFIUS told the companies it was kicking off an accelerated review of the potential deal before it was even signed, skipping a typical 30-day preliminary assessment period and plunging straight into its investigation of the potential national security threats such a deal might raise, according to people familiar with the matter.
Broadcom had earlier said the redomiciliation process would be completed by May 6, but on March 6, following CFIUS’s decision to review the bid, it applied for a court hearing in Singapore regarding the plan, public records show. The company was granted a hearing March 9 at 3 p.m. local time, according to records. Broadcom then said Friday in a Securities and Exchange Commission filing that the Singapore court “directed” the shareholder meeting to take place March 23.
Some CFIUS experts said the move by Broadcom appeared to violate CFIUS’s March 4 order that Broadcom “provide CFIUS with five business days’ notice before taking any action toward redomiciliation in the United States while this Order is in effect.”
A Broadcom spokesman said: “We are aware of the terms in the order and are in full compliance.”
Qualcomm had disclosed CFIUS’s order, which also mandated that it delay the vote on its own board of directors by 30 days, in a March 5 SEC filing.
CFIUS has said it is worried that Broadcom, which has a reputation as a cost-cutting behemoth, would stymie research and development at Qualcomm and weaken it against foreign rivals racing to develop next-generation wireless technology, such as China’s Huawei Technologies Co.
“Given well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States,” a CFIUS official wrote in a March 5 letter to the companies’ lawyers.
In a Friday letter to members of Congress, Broadcom pledged to make the U.S. the leader in 5G development.
Write to Kate O’Keeffe at firstname.lastname@example.org and Ted Greenwald at Ted.Greenwald@wsj.com