Broadcom falls after Sen. Rand Paul questions CA Technologies merger

Finance


It would be the second major challenge to a Broadcom merger this year. President Donald Trump blocked the chipmaker’s proposed deal with Qualcomm in March, citing national security concerns within the Committee on Foreign Investment in the United States.

“If [CFIUS] were looking at Broadcom previously, just because Broadcom has changed their domicile to [the U.S.] doesn’t mean we shouldn’t still look at Broadcom,” Paul said, addressing Secretary of Homeland Security Kirstjen Nielsen.

Broadcom announced in July it had agreed to acquire CA Technologies $18.9 billion in cash. CA Technologies, which makes cloud-based and traditional enterprise software, would help diversify Broadcom, should the deal gain antitrust approvals in the U.S., the E.U. and Japan. The boards of both companies had already approved the deal.

“Broadcom and CA Technologies are both American companies, and there is no basis in fact or law for CFIUS review of our pending transaction,” Broadcom said in a statement later Wednesday. “We have received HSR clearance and the approval of CA shareholders, and we have a clear path to completing the transaction in the fourth calendar quarter of 2018.”

Broadcom’s statement also made reference to an allegedly fraudulent memo related to the merger that the company claims has been circulating around Congress. It was not immediately clear how the memo was related to Paul’s comments.

—CNBC’s Chloe Aiello contributed to this report.



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