Event Driven Takeaways
- After Broadcom redomiciles to the United States, which the company estimates to be complete by May 6, the risk from a possible CFIUS block of a bid for Qualcomm is diminished, practitioners have told Event Driven.
- Once Broadcom completes its redomiciliation, CFIUS could still assert jurisdiction but it would need to make a threshold finding of foreign control of Broadcom. According to the statute, CFIUS’s definition of control “eschews bright lines...control is not defined in terms of a specified percentage of shares or number of board seats. Although shareholding and board seats are relevant to a control analysis, neither factor on its own is necessarily determinative.”
The surprising decision by CFIUS to treat Qualcomm’s contested board of directors’ election as a covered transaction was predicated on Broadcom’s status as a Singapore company. Should Broadcom persist in its bid after redomiciling to the US, the risk of CFIUS blocking the deal is lessened but not extinguished. CFIUS has very broad discretion in determining what constitutes a national security thre