US President Donald Trump on Monday blocked semiconductor maker Broadcom Ltd's proposed takeover of Qualcomm on grounds of national security, ending what would have been the technology industry's biggest deal ever.
President Trump on Monday blocked Broadcom's bid for the chip maker Qualcomm, citing national security concerns.
The news extends President Trump's tough stance on foreign investment in America.
The move by Mr Trump to kill the deal comes only months after the U.S. 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".
The President cited national security concerns in a White House statement, which read in part, "There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom)... through exercising control of Qualcomm Incorporated (Qualcomm), a DE corporation, might take action that threatens to impair the national security of the United States".
The Broadcom-Qualcomm deal does not involve China-based companies.
The Presidential order is seen as a move to shelter USA companies from foreign competition.
Broadcom, co-founded by Henry Samueli and Henry Nicholas III, was long based in Irvine before it was bought by Singapore-based Avago Technologies in 2015.
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In the letter, a Treasury official said CFIUS accelerated its investigation into the bid in light of Broadcom's violations of the panel's earlier order. The committee last week directed Qualcomm to postpone its shareholder meeting so it could investigate the proposed Broadcom takeover to assess whether the deal poses any national security risk.
So it would be surprising if CFIUS's authority was overturned at this stage, said Brian Fleming, a lawyer with Miller & Chevalier and former Assistant Attorney General for National Security who managed CFIUS matters for the Department of Justice. On April 5th, Qualcomm stockholders were to vote on their company's 11-seat Board of Directors. More interesting news about QUALCOMM Incorporated (NASDAQ:QCOM) were released by: Streetinsider.com and their article: "Form 425 QUALCOMM INC/DE Filed by: Broadcom Ltd" published on March 12, 2018 as well as Reuters.com's news article titled: "Broadcom calls Qualcomm's offer for price talks "engagement theater" with publication date: February 26, 2018.
The Wall Street Journal reported on Friday that Intel Corp's competitive concern about Broadcom's attempt to buy mobile chip rival Qualcomm had led it to consider a range of acquisitions in response, including a bid for Broadcom.
GO Scale - Philips: In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as US$2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. The company must stop the acquisition together with Broadcom and provide written proof of this once the step has been taken. Trump has done it before, blocking a Chinese state-owned company from buying an American semiconductor firm back in September.
"Qualcomm has become well-known to, and trusted by, the USA government", said Deputy Assistant Secretary for Investment Security Aimen Mir.
Broadcom then claimed that if it acquired Qualcomm, it would commit to making the United States "the global leader in 5G".
Shares of Broadcom were marginally higher at $264.50 a share in after-hours trading.