Chipmaker Broadcom has announced that efforts to redomicile itself from Singapore to the United States had been successfully completed. Prior to the acquisition of Broadcom by Avago of Singapore in 2016 Broadcom was an American firm. Plans to redomicile had been announced last year in November.
“The completion of our redomicilation to the United States marks an important milestone in our company’s history as Broadcom has been an American company in every respect but our legal domicile,” said Hock Tan, the chief executive officer and president of Broadcom.
Exchange of shares
According to the chipmaker all Broadcom Ltd’s share were exchanged for newly issued ones of Broadcom Inc on a basis of one-for-one. The stock of Broadcom will continue to trade under the old ticker.
While San Jose in California has been a co-headquarter it will now become the sole headquarters of Broadcom Inc. The redomicilation will likely not have any impact on employees or the day-to-day operations as the chipmaker was already being run from San Jose.
In the United States Broadcom has a presence in over 35 states where it employs more than 8,300 workers. Broadcom intends to invest approximately $3 billion on a yearly basis in research and development and an additional $6 billion in manufacturing.
Committee on Foreign Investment in the United States
The redomicilation to the U.S. could now allow the chipmaker to acquire U.S. firms without having to be scrutinized by CFIUS – Committee on Foreign Investment in the United States. The CFIUS has powers to halt deals which are likely to pose a threat to the national security of the United States.
Broadcom’s move to the U.S. comes less than a month since the chipmaker was blocked by U.S. President Donald Trump from acquiring Qualcomm on national security grounds. While issuing the order Trump also prohibited the candidates that Broadcom had proposed to stand for election as directors of Qualcomm. Earlier the Committee on Foreign Investment in the United States had expressed concerns over the deal.
Besides the potential threat to national security the Committee on Foreign Investment in the United States also gave other reasons why the deal should be halted including a reputation Broadcom has gained of reducing spending on research and development. Thus according to the committee if Broadcom were allowed to acquire Qualcomm it would slash the latter’s R&D budget and consequently give countries such as China an advantage with regards to the development and mass rollout of crucial technologies such as 5G.