Finance

Trump blocks Broadcom takeover bid for Qualcomm

Trump blocks Broadcom takeover bid for Qualcomm

Singapore-based Broadcom Ltd withdrew its $117 billion bid to acquire Qualcomm Inc on Wednesday, two days after U.S. President Donald Trump blocked the attempt citing national security concerns. On recommendation from the Committee on Foreign Investment in the United States, the president found there was "credible evidence" that the Singapore-incorporated Broadcom "might take action that threatens to impair the national".

Broadcom thanks the independent nominees who stood for election to the Qualcomm board, not only for their time and effort but also for their unwavering commitment to act in the best interests of Qualcomm stockholders. It said Broadcom's attempted takeover of Qualcomm could pose a risk to US national security. The expressed fear was that Broadcom might curb investment in USA -based 5G technologies, clearing the way for China's Huawei Technologies Co.to dominate development of this next-generation wireless technology and related technical standards for years to come.

The Presidential order is seen as a move to shelter USA companies from foreign competition.

Broadcom and Qualcomm are likely to pursue other deals now that Broadcom's offer has been withdrawn.

The growing influence of Huawei is a major factor killing the Qualcomm-Broadcom deal.




A Broadcom takeover could see the company cut research and development spending by Qualcomm or sell strategically important parts of the company to other buyers, including those in China, officials and analysts said.

Trump had instructed Broadcom to back off after a USA panel charged with reviewing foreign acquisitions of domestic companies suggested that the deal could impede American technological competitiveness. And if the acquisition had gone through, then it would be the largest technology deal made in the pages of history. Even after the hostile takeover of Qualcomm was blocked, Broadcom says it plans to complete its move to the U.S. But the steps against Broadcom weren't usual as the mergers are rarely killed before the shareholders of a publically traded company are given the opportunity for making a decision on the proposal for them.

The move followed President Doanld Trump's order for Broadcom to.

In a letter, the CFIUS had confirmed the national security concerns.

Broadcom also tried to curry favor by moving its legal headquarters from Singapore to the U.S within the next few weeks.


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