US has ordered Broadcom to give notice of steps to redomicile - <b>Technical Lobby</b>

Saturday, March 10, 2018

US has ordered Broadcom to give notice of steps to redomicile

A US national security panel has ordered Singapore-based chipmaker Broadcom to provide it with five business days' notice before taking any action toward redomiciling to the United States, a regulatory filing this week revealed.
US has ordered Broadcom to give notice of steps to redomicile

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.

"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 U.S. 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. This meeting will be held on March 23, the company said. The Singapore Court will then have to greenlight the redomiciliation.

"We are aware of the terms in the (CFIUS) order and are in full compliance," a Broadcom spokeswoman said by email when asked whether the company had given CFIUS the required five-day notice on action to redomicile.

CFIUS, an inter-agency panel led by the US Treasury, rarely reviews mergers before a deal has been clinched. The review of Broadcom's bid illustrates the US government's expanding focus on the competitiveness of the national semiconductor industry as China advances.

The US government is concerned that Chinese companies, including the big network equipment and mobile phone maker Huawei Technologies Co Ltd, would take advantage of any openings to take the lead in the next generation mobile phone networks known as 5G.

"As a US corporation, our future acquisitions in the United States would not be subject to certain regulatory processes required for acquisitions by foreign corporations," Broadcom said in a regulatory filing on Friday.
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