Economy

President Blocks Broadcom's Plan To Take Over Qualcomm

President Blocks Broadcom's Plan To Take Over Qualcomm

US President Donald Trump today blocked Singapore-based company Broadcom's United States dollars 117 billion bid for chip maker Qualcomm, citing national security concern.

Trump said there is "credible evidence" that Broadcom "might take action that threatens to impair the national security of the United States".

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Broadcom said Wednesday that it had withdrawn its $117 billion hostile offer for Qualcomm, saying "we are disappointed with this outcome" but will comply with Trump's order blocking the move.

Qualcomm has made big investments in the 5G research. John Cornyn of Texas and Tom Cotton of Arkansas, were among the first to urge CFIUS to investigate Broadcom's acquisition attempts.

Broadcom has been trying to acquire chipmaker Qualcom for several months now.

Based in Singapore, Broadcom past year made an unsolicited bid north of $100 billion to purchase Qualcomm.

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"Broadcom's board of directors and management team sincerely appreciate the significant support we received from the Qualcomm and Broadcom stockholders throughout this process", Broadcom said.

The order further requires both Broadcom and Qualcomm to certify with the CFIUS that the takeover effort has been terminated, and to provide details with "a timeline for projected completion of remaining actions".

A Broadcom-Qualcomm merger would create a new and powerful rival in two areas that Intel is banking on for future revenue growth: smartphone processors and data centers, according to the Journal. According to Bloomberg, the company is now working to shift its headquarters from Singapore to the U.S. The transition is expected to be completed by April 3.

Decision by the President for forbidding the blockbuster agreement underscored the lengths and is willing to go for sheltering the Americans companies from the foreign competition.

"I$3 f the decision was prompted by Trump's deep skepticism about global trade and Fortress America instincts, that is less defensible and could haunt USA companies in their worldwide dealings", according to the editorial. Not long after, the Trump administration scuttled Alibaba-affiliated Ant Financial's bid to acquire Dallas-based fintech company MoneyGram International.

Also, a few months back, Huawei said it failed to strike a deal with a US carrier (believed to be AT&T) to sell its smartphones.