U.S. panel says concerns over Broadcom deal warrant full investigation: Treasury

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(Reuters) – A U.S. government security panel has identified potential security concerns that warrant a full investigation of Singapore-based Broadcom Ltd’s (AVGO.O) $117 billion bid for chipmaker Qualcomm Inc (QCOM.O), a senior U.S. Treasury official said in a letter to the companies on Monday.

Hock Tan, CEO of Broadcom, speaks on the floor of the New York Stock Exchange shortly before the opening bell in New York, U.S., February 12, 2018. REUTERS/Lucas Jackson

Some of the concerns relate to risks associated with Broadcom’s relationships with third party foreign entities, Aimen N. Mir, Deputy Assistant Secretary for Investment Security said in the letter, dated March 5 and released by Qualcomm on Tuesday. (bit.ly/2FtCesY)

He said the bulk of the concerns identified by the Committee on Foreign Investment in the United States (CFIUS), which on Sunday asked for time to examine the deal, were classified.

A source familiar with CFIUS’ thinking told Reuters on Monday that if the deal was completed, the U.S. military was concerned that within 10 years, “there would essentially be a dominant player in all of these technologies and that’s essentially Huawei.”

Reporting by Supantha Mukherjee in Bengaluru