A U.S. government panel on Sunday ordered Qualcomm Inc to delay its March 6 shareholder meeting, an unprecedented move that cast new doubt on Singapore-based Broadcom Ltd`s $117 billion bid for its U.S. semiconductor peer.

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The intervention highlights U.S. concerns about safeguarding semiconductor technology. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security concerns, does not typically review mergers before companies have clinched an agreement.

CFIUS asked Qualcomm to postpone its shareholder meeting, that had been scheduled for Tuesday, by 30 days. Reuters had reported last week that CFIUS had begun looking at Broadcom`s bid amid growing pressure from politicians, including senior Republican Senator John Cornyn.

"This measure will afford CFIUS the ability to investigate fully Broadcom`s proposed acquisition of Qualcomm," the U.S. Department of Treasury said in a statement.

As the semiconductor industry is locked in a race to develop chips that power so-called 5G wireless technology that allow the transmission of data at faster speeds, San Diego-based Qualcomm has emerged as one of the biggest competitors to Chinese companies vying for market share in the sector, such as Huawei Technologies Co, making it a prized asset.

Part of the CFIUS` current concern, which is echoed in a letter Cornyn sent to Treasury Secretary Steve Mnuchin, could lie in the fact that Broadcom has failed to strike a deal with Qualcomm and has resorted to what is essentially a hostile takeover by putting forward a slate of six Broadcom nominees for Qualcomm`s 11-member board.

Broadcom shares dropped 2.5 percent in morning trading, while Qualcomm fell 0.7 percent.

Broadcom said on Monday that CFIUS` intervention was the result of secret moves made by Qualcomm on Jan. 29 to seek an investigation into the offer, which Qualcomm`s board has said significantly undervalues the company.

Before Broadcom disclosed its buyout offer for Qualcomm in November, President Donald Trump himself announced Broadcom`s plan to shift its headquarters back to the United States after a White House meeting with Chief Executive Hock Tan.

Trump praised the move at the time, calling Broadcom "one of the really great, great companies."MOVING BACK TO THE U.S.

Broadcom said on Monday it is run by a board and senior management team consisting almost entirely of Americans and is largely owned by the same U.S. institutional investors that own Qualcomm.

"Broadcom continues to pursue the redomiciliation process as expeditiously as possible," Broadcom said. "Upon completion of the redomiciliation, Broadcom’s proposed acquisition of Qualcomm will not be a CFIUS covered transaction."

Qualcomm, which has told shareholders it is open to the merger at the right price and terms, had said last week it had no intention of delaying the annual shareholder meeting.

"Qualcomm now has their excuse to postpone their critical vote, giving them some breathing room to work on its acquisition of NXP Semiconductors NV, attempt to make progress on their Apple Inc licensing issues, and attempt to build a stronger case for shareholders," said Bernstein analyst Stacy Rasgon.

Qualcomm on Monday extended its $44-billion tender offer for NXP to March 9, as it awaits clearance from China`s MOFCOM, the only regulator globally required to approve the deal that has yet to do so.

Qualcomm is in a legal battle with Apple over licensing and allegations that it has not delivered on promised rebates - seen by analysts as an effort by Apple to undermine Qualcomm`s strong position in mobile chips.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)