Broadcom withdraws Qualcomm offer after Trump rejects deal

White House Issues Order Prohibiting Broadcom's Bid for Qualcomm

US President Donald Trump has blocked a planned takeover of chipmaker Qualcomm by Singapore-based rival Broadcom on grounds of national security.

In a presidential order, Trump on Monday blocked Broadcom's almost $121 billion bid for Qualcomm, saying it might "impair the national security" of the country.

Additionally, the executive order prohibits a list of 15 Broadcom people from serving as a director with Qualcomm, plus Qualcomm can't even accept nominations or votes for any of them.

The takeover was under investigation by the normally secretive Committee on Foreign Investment in the United States (CFIUS).

Scott Peters, a Democrat who represents the 52nd congressional district that includes northern San Diego, also opposed the deal because of concerns about national security and US competitiveness in wireless technology.

"Although we are disappointed with this outcome, Broadcom will comply with the order", the Singapore-based company announced prior to the opening of financial markets. However, Broadcom is known for its track record of cutting research and development, and concerns exist that a merger could threaten the R&D output of Qualcomm and allow Chinese companies to pull ahead.

It would have been the biggest-ever deal in the tech sector.

The company launched its bid for the takeover back in November of previous year and was spontaneously and repeatedly rejected by Qualcomm's board and management.

Broadcom is actually made up of two companies.

CFIUS noted that a Broadcom-Qualcomm merger could weaken Qualcomm's leadership in the field.

Meanwhile, Broadcom announced today that is has accelerated its timetable for redomiciling its organization from Singapore to the USA, moving up the date from May 6 to April 3. Tan argued that combining Broadcom and Qualcomm would further U.S. interests by advancing the development of the next generation of wireless technology known as 5G, according to a person familiar with the meeting.

In its statement, Broadcom confirmed that it still intends to make its move to the US.

By way of a quick recap, the months-long saga began in November when Qualcomm rejected a takeover offer from Broadcom.

Trump's decision was foreshadowed by a March 5 letter from Treasury Department regulators to the companies that raised what it called "national security risks" of the takeover, particularly the looming transition to 5G cellular networks.

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