Broadcom says fake memo on merger circulating

Broadcom Inc., which is closing in on a purchase of CA Technologies Inc., said it is the victim of a fraudulent effort to raise national-security concerns about the deal.

The company said a memo has been circulating among U.S. lawmakers that purports to be a Defense Department assessment, prepared for a national-security panel, outlining the need for a review of the deal. The company said it was told by Defense Department officials that the memo is a forgery.

The Defense Department, in a statement, said: “Our initial assessment is that this is likely a fraudulent document.”

It’s unclear whether parties may have been trying to derail the deal or plant the memo in an effort to profit from share price moves. A memo matching the one described by Broadcom was supplied anonymously to Bloomberg News earlier this week.

Broadcom and the Defense Department issued their statements about the memo hours after Sen. Rand Paul of Kentucky cited concerns about the tie-up. Paul asked whether the deal would undergo a national-security review, saying he would request one later in a letter.

Broadcom is aiming to close its $19 billion acquisition of software-maker CA Technologies by the end of the year, the latest in a string of mergers that has transformed the company into one of the world’s largest chip makers. By adding CA Technologies, Broadcom would gain a large business in network software used in the energy, financial and defense spheres, among others.

But the company is also coming off a stinging loss. In March, President Donald Trump blocked Broadcom’s hostile $117 billion bid to buy Qualcomm Inc., citing risks to U.S. national security and the nation’s development of nextgeneration wireless technology.

That decision followed a security review by the Committee on Foreign Investment in the U.S., which includes representatives from the Treasury, Defense, State and Homeland Security departments. The committee does its work in secret and doesn’t comment on its decisions, even after the fact.

After Trump’s rejection, Broadcom moved its headquarters from Singapore to the U.S. Some national-security proponents saw the change in domicile as an effort to work around the review process.