President Trump halts Broadcom takeover of Qualcomm




 

(Reuters) - U.S. President Donald Trump issued an order on Monday prohibiting semiconductor maker Broadcom Ltd's <AVGO.O> proposed takeover of Qualcomm Inc<QCOM.O> on grounds of national security, bringing an end to what would have been the technology industry's biggest deal ever.

Qualcomm had rebuffed Broadcom's $117 billion takeover bid, which was under investigation by the U.S. Committee on Foreign Investment in the United States (CFIUS), a multi-agency panel led by the U.S. Treasury Department that reviews the national security implications of acquisitions of U.S. corporations by foreign companies.

"The proposed takeover of Qualcomm by the Purchaser (Broadcom) is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited," the presidential order released on Monday said.

The order issued by the White House cited "credible evidence" that led Trump to believe that Broadcom taking control of Qualcomm "might take action that threatens to impair the national security of the United States."

This is the fifth time ever a U.S. President has blocked a deal based on CFIUS objections and the second deal Trump has stopped since assuming office.

Trump's move accelerated a decision that appeared likely after CFIUS told Broadcom in a letter on Sunday that its investigation "so far confirmed the national security concerns."

The U.S. Treasury Department letter was "obviously a poison pill," Jim Lewis, a CFIUS expert at the Center for Strategic and International Studies, said before the Trump order. He described the CFIUS communication to Broadcom as "unprecedented."

The semiconductor industry is racing to develop chips that power so-called 5G wireless technology, allowing the transmission of data at faster speeds.

San Diego-based Qualcomm has emerged as one of the biggest competitors to Chinese companies vying for market share in the sector, such as Huawei Technologies Co, making it a prized asset.

A source familiar with CFIUS' thinking had said that if the deal was completed, the U.S. military was concerned that within 10 years, "there would essentially be a dominant player in all of these technologies and that's essentially Huawei, and then the American carriers would have no choice. They would just have to buy Huawei (equipment)."

Broadcom had struggled to complete its proposed deal to buy Qualcomm which had cited several concerns including the price offered and potential antitrust hurdles.


(Reporting by Diane Bartz and Chris Sanders in Washington; Supantha Mukherjee and Pushkala Aripaka in Bengaluru; Greg Roumeliotis in New York; Editing by Peter Henderson)

COMMENTS

More Related News

Republicans risking conservative backlash over immigration
Republicans risking conservative backlash over immigration

NEW YORK (AP) - The push toward immigration votes in the House is intensifying the divide among Republicans on one of the party's most animating issues and fueling concerns that a voter backlash could cost the GOP control of the House in November.

Judge jails ex-Trump campaign chair Manafort ahead of trial
Judge jails ex-Trump campaign chair Manafort ahead of trial

President Trump's former campaign chairman, Paul Manafort, was ordered into custody after a federal judge revoked his house arrest, citing obstruction of justice charges.

Giuliani: Trump Will Win Second Term Easily, Especially If Dems Nominate
Giuliani: Trump Will Win Second Term Easily, Especially If Dems Nominate 'Moron' Biden

"They need someone new, who would be more threatening to us," Rudy Giuliani, himself a failed presidential candidate in 2008, tells HuffPost.

Trump Says It's OK He Misled Media About Son's Russia Meeting
Trump Says It's OK He Misled Media About Son's Russia Meeting

President Donald Trump said on Friday that it doesn't matter if he misled the

The Latest: Trump hails big tariffs on China
The Latest: Trump hails big tariffs on China

President Donald Trump is hailing his "very big tariffs" on China. Trump is speaking Friday on the North Lawn of the White House, just as his administration just announced a 25 percent tariff on up to $50 billion worth of Chinese imports. Trump says there is "great brain power"

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.