Both Broadcom’s and CA Technologies share prices abruptly fell this week after a memo circulated purporting to be from the US Department of Defense.
The memo cited the need for review by the Committee on Foreign Investment in the United States (“CFIUS”) into Broadcom’s $19 billion CA Technologies acquisition.
Broadcom wrote this week: “We have been informed by DoD officials that this memo is in fact a forged document.”
The company added: “Broadcom and CA Technologies are both American companies, and there is no basis in fact or law for CFIUS review of our pending transaction. 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.”
See also: Broadcom CEO in Bullish Defence of CA Technologies Acquisition
Previously Singapore-based, Broadcom re-domiciled to the US in April this year.
Broadcom’s shares fell 4 percent after the initial reports of the memo, CA Technologies fell 5 percent. Both have since pared the majority of the losses.
The fake letter circulated as Kentucky Senator Rand Paul (allegedly independently and without having seen the letter) wrote to the Treasury to “express concerns” at the acquisition. He described Broadcom as “Chinese-controlled”.
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Dan Primack of Axios, who received a copy of the letter on Monday, wrote “Assuming the memo was indeed fraudulent, then we might have just entered a new phase of short-seller espionage.”
The letter comes as experts earlier told Computer Business Review that CFIUS is increasingly exercising its ability to question foreign acquisitions.
The letter was lent credibility by the fact that CFIUS had helped block a planned $117 billion (£84 billion) takeover of US chip giant Qualcomm by Broadcom earlier this year.
See also: CFIUS Flexes Muscles as Trump Blocks Hostile Qualcomm Takeover
There is “credible evidence” that the hostile takeover would result in “action that threatens to impair the national security of the United States, the White House claimed today, issuing an order blocking the takeover and ordering Qualcomm to reconvene its 2018 AGM on the earliest possible date – confirmed by the company as March 23, 2018.
Broadcom, which was ordered to “immediately and permanently abandon the proposed takeover,” said at the time that it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns.”
