Broadcom To Scrap Qualcomm Bid After Trump Block

Mr. Tan goes to Washington the undoing of Broadcom's $117-billion bid for Qualcomm

Broadcom To Scrap Qualcomm Bid After Trump Block

The company, which is in the process of moving its headquarters to the USA, formally withdrew its unsolicited bid for US -based Qualcomm and its slate of nominees to Qualcomm's board on Wednesday.

Broadcom said it had withdrawn its candidates for the board of directors of Qualcomm, which it had hoped shareholders would elect to endorse the $117 billion deal that would have been the biggest mergers in the tech sector.

The US Treasury Department (which leads the Committee on Foreign Investment in the US) claims the Broadcom/Qualcomm threatens Qualcomm's future leadership within the next generation of wireless technology. The expressed fear was that Broadcom might curb investment in US -based 5G technologies, clearing the way for China's Huawei Technologies dominate development of this next-generation wireless technology and related technical standards for years to come.

The editorial board notes, however, that Trump could use his authority to block foreign acquisitions of US companies to further protectionist aims.

The Broadcom/Qualcomm transaction had been under review by CFIUS since January 2018 when Qualcomm submitted a unilateral notice of the transaction to CFIUS.

Further, Donald Trump ordered that both Qualcomm and Broadcom must "immediately and permanently abandon the proposed takeover".

For the last few months, the Singapore-based company has been pushing hard to acquire Qualcomm, which on its end is making efforts to reject the bid.

The order quashing the Broadcom-Qualcomm deal is being met with a wide range of reactions.

In September 2017, President Trump issued an Executive Order blocking a Chinese investment firm, Canyon Bridge Capital Partners Inc., from acquiring Lattice Semiconductor Corporation.

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.

"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. Mr. Trump pre-emptively blocked the purchase on Monday, citing national security concerns.

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

"Such a company, if subjected to national or terrorist interests adverse to America, could install lockout features to block our security agencies from monitoring mobile data".

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