Trump halts Broadcom takeover of Qualcomm

Adjust Comment Print

Now that Broadcom has been shoved aside, Qualcomm will be under pressure to prevent its stock price from sinking while trying to complete its own proposed takeover - a proposed $43 billion purchase of NXP Semiconductors.

Singapore-based semiconductor company Broadcom has been engaging in a hostile takeover bid for Qualcomm, well known to us for their Snapdragon range of processors.

The order came following Broadcom's moves to speed up the relocation of its corporate headquarters from Singapore to the US - which could have derailed the jurisdiction of the Committee for Foreign Investment in the U.S.to investigate the potential deal for national security risks. However as Broadcom has already been going through great lengths to acquire the company, including planning to redomicile to the USA so that the acquisition was no longer a foreign deal, it might yet prove too early to rule them out entirely. The U.S. feared that Broadcom would curtail investment in research and development, undermining Qualcomm's position in developing 5G and creating an opportunity for China's Huawei Technologies Co.

"Its hard to see a good reason why we should hand over one of our leading computer-chip makers, and thereby give Chinese companies a leg-up in the race to develop 5G and the next generation of technology".

Trump issued an order on Monday blocking the potential merger between Singapore-based Broadcom and Qualcomm - headquartered in San Diego, Calif. - signaling yet another protectionist move for the Trump administration rapidly aligning more firmly against the globalist economic model.

"Broadcom's dismissive rhetoric notwithstanding, this is a very serious matter for both Qualcomm and Broadcom", Qualcomm fired back in response.

Under the order, the Trump administration cites concerns that a Broadcom takeover of Qualcomm could "impair the national security of the United States".

Spotify Launches Service in Israel at $6 a Month
Line-In is a work-in-progress, and more features will be added over time as Spotify receives more feedback on the feature. Google does not release paid subscriber numbers for its service, Google Play Music.

The Treasury Department's letter was addressed to lawyers for Broadcom and Qualcomm, and was made public by Qualcomm.

In the official executive order statement regarding the proposed takeover Trump has prohibited the takeover as well as prohibited any mergers, acquisitions, or takeovers that are deemed to be "substantially equal" in nature, which essentially means that no deal like this between the two companies will ever take place in the future either.

It the second time in recent weeks the President has raised "national security" in trade related matters, having said it was central in his decision to impose hefty tariffs on imported steel and aluminium. CFIUS stepped in and through an interim order directed Qualcomm to postpone its board meeting, scheduled for March 6, for 30 days.

The move by Mr Trump to kill the deal comes only months after the USA president himself stood next to Broadcom chief executive Hock Tan at the White House, announcing the company's decision to move its headquarters to the United States and calling it "one of the really great, great companies".

That was just the fourth time in a quarter century that a US president stopped a foreign takeover of an American firm on national security grounds.

Broadcom can not appeal against the US presidential decision that effectively blocked the largest tech deal.

Qualcomm shareholders were set to vote last week on whether to replace six of its 11 directors with Broadcom candidates when the CFIUS delayed the scheduled board meeting to review the takeover.

Comments