An effort is being made to move forward on the Broadcom and Brocade deal, currently stuck in negotiations with CIFUS. Broadcom CEO Hock Tan yesterday met US President, Donald Trump, in the Oval Office. Together they made an announcement that Broadcom will bring their headquarters back to the US. The statement is being widely reported in Bloomberg, Reuters, and CNBC amongst others.
This move will bring $20bn annual revenue back to the USA; including $3bn a year in research and $6bn a year in manufacturing.
“America is again the best place to lead a business with a global footprint.” – Hock Tan, CEO, Broadcom
Although the share price AVGO 630,12 +19,96 +3,27% dropped on the announcement, it has since risen back to previous positions. Having their headquarters within the US will make negotiations more straightforward as it will no longer be a foreign investor. Similarly, they are supporting the President’s tax reform plans, which will lower tax rates on companies repatriating profits back to the USA. Broadcom already has an office in San Jose, California, which could be a location for their new corporate headquarters.
“The returns we can drive by continuing to pursue our growth strategy far outweigh the incremental taxes we would expect to pay by redomiciling in the USA. We support the tax reform plan because it is pro-growth and would allow companies like us to bring off-shore earnings back to the United States after paying an annual U.S. minimum tax on global profits.” – Tom Krause, CFO, Broadcom
Broadcom has a press-release (Broadcom Limited Announces Intention to Redomicile in the United States).
Trump announces the return of Broadcom HQ to US (via Bloomberg on YouTube).