St. Louis, MO: Phyllis Schlafly Eagles voiced strong support this week for a federal move requiring further scrutiny of a hostile takeover attempt of San Diego-based technology firm Qualcomm by a Phillippine competitor, Broadcom. Phyllis Schlafly Eagles President Ed Martin hailed the Trump administration’s intervention in this attempted forced acquisition.
“We applaud the Trump administration for stepping in before a foreign-owned company with questionable intentions could execute its hostile takeover of an American leader in the critical, strategic area of wireless and mobile technologies,” Martin said. “Qualcomm is recognized as the leading U.S. company in the race to establish the all-important next-generation 5G standards. Qualcomm is central to whether the U.S. or China becomes the leader of 5G technology, a question that will have profound consequences for America and the world.”
The Committee on Foreign Investment in the United States ordered a delay in Qualcomm’s shareholder meeting set for March 6, where a majority slate of Broadcom-picked individuals would potentially have replaced Qualcomm board members. CFIUS stated in its March 5 letter, “CFIUS has come to believe that Broadcom’s successful hostile takeover attempt of Qualcomm . . . could pose a risk to the national security of the United States.”
“The National Security Council has rightly identified emerging 5G standards as of vital strategic concern,” Mr. Martin continued. “It would jeopardize America’s security and economic interests were Broadcom to gobble up Qualcomm, thereby clearing the field of 5G for China’s Huawei.”
The CFIUS letter cited Qualcomm’s global “technological success and innovation,” “unmatched expertise” and significant investment in research and development. Thanks to this American company’s R&D commitment and technological excellence, its technology has been adopted by standards-setting bodies, including for 4G LTE wireless and mobile systems.
“We strongly urge CFIUS and President Trump to prohibit Broadcom from acquiring Qualcomm,” Mr. Martin said. “Our national security, as well as our economic prosperity in this area of technology, and our global leadership in patents, invention and technological standards far outweigh any benefit from this merger.”
On the technological standards for 5G, CFIUS said, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.” The letter also expressed concern over the loss of this U.S. firm’s work on cybersecurity and with national defense agencies as having “a detrimental impact on national security.”