"In compliance with the CFIUS order, Qualcomm will delay its annual meeting of stockholders and election of directors for at least 30 days so that CFIUS can fully investigate Broadcom Limited's proposal to acquire Qualcomm".
The order by the Committee on Foreign Investment in the United States (CFIUS), which reviews deals that have potential national security implications, heightened tensions between the two companies that have been apparent since China-based Broadcom first proposed buying Qualcomm in November 2017 in what would be by far the largest deal in tech history.
Broadcom plans to complete a move of its headquarters from Singapore back to the United States by mid-May to remove a roadblock to the proposed deal, Reuters reported on March 2.
Broadcom on Monday said Qualcomm did not talk about submitting a voluntary notice to CFIUS in any of its interactions, including in the two meetings on February 14 and February 23.
Qualcomm and Broadcom were not immediately available for comment.
But politicians have been piling on the pressure, as senator John Cornyn last week called for the Trump administration to conduct a review into the bid.
Broadcom has been trying for months to take over Qualcomm in a blockbuster $95 billion deal that would massively consolidate the semiconductor market.
Broadcom has nominated six alternative candidates to Qualcomm's 11 member board of directors in a hostile takeover bid. The company already is run from the United States, has many US employees, and owns critical semiconductor operations and technologies, Rasgon noted. "This measure will afford CFIUS the ability to investigate fully Broadcom's proposed acquisition of Qualcomm".
Five other members of Congress signed the Gallagher letter on Friday that was sent to Treasury Secretary Steve Mnuchin.
Qualcomm officials said that notwithstanding Broadcom's dismissive rhetoric, "this is a very serious matter for both" companies. An increasingly disbelieving world has since been subjected to the offer being raised and then dropped again following Qualcomm's acquisition of Dutch chipmaker, NXP. CFIUS is an independent, multi-agency US governmental body charged with protecting USA national security.
"Qualcomm now has their excuse to postpone their critical vote, giving them some breathing room to work on its acquisition of NXP Semiconductors NV (NXPI.O), attempt to make progress on their Apple Inc (AAPL.O) licensing issues, and attempt to build a stronger case for shareholders", said Bernstein analyst Stacy Rasgon.