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Fighting a hostile bid, Qualcomm names independent director as chairman

Qualcomm Inc. said its executive chairman, Paul Jacobs, will leave his post as the company continues to fend off a proposed $117 billion takeover by Broadcom Ltd.

Qualcomm said Jacobs will be replaced by independent director Jeffrey Henderson, though he will remain on the board.

Henderson, who was the CFO of Cardinal Health Inc. for nine years, will serve as nonexecutive chairman as Qualcomm decided to discontinue the executive chairman role.

Without mentioning Broadcom's takeover bid, Qualcomm lead director Tom Horton said it is in the "best interest" of the company and its shareholders "at this important juncture in Qualcomm's history" to have an independent director as new chairman.

Meanwhile, Broadcom assured members of the U.S. Congress in a letter that it will not sell critical national security assets to foreign companies. The move came a week after the Committee on Foreign Investment in the United States, or CFIUS, started looking into the pending takeover of Qualcomm.

"The bottom line is that a combined, American Broadcom-Qualcomm will be a more focused and stronger champion for sustained United States leadership in 5G than a stand-alone Qualcomm, an outcome that strongly supports America's national security interests," Broadcom President and CEO Hock Tan said in the letter.

Tan reiterated the Singapore-based chipmaker's pledge to ensure U.S. leadership in developing 5G, the next generation mobile phone networks.

Tan said Broadcom is expected to complete its re-domiciling to the U.S. by May 6 and would have more than 25,000 employees in the country after acquiring Qualcomm.

On March 5, the U.S. Treasury Department said in a letter that the pending deal presents a potential national security risk that merits a full investigation.

On the same day, Qualcomm complied with a CFIUS order to delay its annual meeting and election of directors for at least 30 days to allow full regulatory review of Broadcom's bid.