Trump points to national security in blocking Broadcom's attempted Qualcomm takeover

Trump blocks Broadcom's $117 billion bid for Qualcomm out of national security concerns, a highly unusual move

Trump blocks Broadcom's $117 billion bid for Qualcomm out of national security concerns, a highly unusual move

The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited. The move reflects the Trump administration's concerns over China's technological prowess as the world moves to 5G, the next generation standard for wireless technologies.

The White House statement directs Broadcom and Qualcomm to "immediately and permanently abandon the proposed takeover", and verify in writing to the foreign investment committee that they have indeed terminated the deal and any such variation.

Broadcom's attempts to accelerate the relocation of its corporate headquarters from Singapore to the USA may have been a misstep in its efforts to ease CFIUS's concerns.

The death of Broadcom's bid for Qualcomm at the hand of Donald Trump leaves a worrying fog for others to navigate. In a statement, the company said "US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation".

Broadcom Chief Executive Hock Tan and other Broadcom representatives were scheduled to meet with CFIUS officials on Monday, according to the letter.

Although the particular deal is complicated by the fact that Broadcom is based in Singapore, the more important issue is actually to have companies in the US "get stronger and stronger" rather than getting diluted by the combination of two very large companies, Krosby told CNBC.

The notice was required as part of CFIUS's order postponing Qualcomm's annual shareholder meeting, previously scheduled for March 6, for 30 days to it could investigate. It's been working for more than a year to close that deal, which Qualcomm says is key to entering new, fast-growing markets.

More notable recent QUALCOMM Incorporated (NASDAQ:QCOM) news were published by: Fool.com which released: "Better Buy: Intel Corporation vs. Qualcomm Inc." on March 07, 2018, also Reuters.com with their article: "Broadcom promises on security, Qualcomm revamps board" published on March 09, 2018, Seekingalpha.com published: "Podcast: Qualcomm-Broadcom, Gaming Industry Meets Trump, Machine Learning Software" on March 11, 2018. Earlier this morning, Broadcom moved up the date when it would become an American company domiciled in DE from early May to April 3rd.

President Trump on Monday blocked Broadcom's bid for the chip maker Qualcomm, citing national security concerns.

CFIUS also would need to weigh that Qualcomm provides sensitive products to the US Defence Department, has a dominant role in US telecommunications infrastructure and performs significant research and development, Griner said. While Qualcomm isn't likely to complain much given that it repeatedly rejected Broadcom's bids as undervalued, Broadcom now faces the prospect of having to either look at another acquisition target or accept that it will have to tackle 5G by itself.

Huawei has a dominant position in China, which is set to become the world's biggest 5G market by far, and has also made inroads in the rest of world to compete with rivals such as Ericsson (ERICb.ST) and Nokia (NOKIA.HE) in several lucrative markets, including countries that are longstanding US allies.

Shares of Broadcom rose more than 3.5 percent on Monday while Qualcomm's stock edged lower.

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