ibusinesslines.com March 17, 2018

Broadcom Takeover of Qualcomm Blocked By Trump

13 March 2018, 09:46 | Kelvin Horton

Trump halts Qualcomm takeover by Broadcom for national security

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

President Donald Trump blocked Singapore chipmaker Broadcom from pursuing a hostile takeover of us rival Qualcomm on national-security grounds.

The move by Trump to kill the deal comes only months after the USA 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 order cited "credible evidence" that led Trump to believe that Broadcom's taking control of Qualcomm "might take action that threatens to impair the national security of the United States".

Broadcom downplayed chances that the CFIUS investigation (which began last week) might disrupt a potential deal.

"I have seen San Diego defense companies suffer massive theft of intellectual property by agents of China's government and the defense industrial complex with which it is inextricably entwined", Hunter said in a release.

Broadcom-which was formerly known as Avago and adopted its new name after buying the original USA -based Broadcom in 2016-is based in Singapore.

Broadcom Chief Executive Hock Tan and other Broadcom representatives were scheduled to meet with CFIUS officials on Monday, according to the letter. Both companies are required to go through and finalize the process that signifies the proposed takeover has been abandoned, which includes getting a written certification that such a deal has been stopped.

In another letter Sunday, the Treasury Department official, writing on behalf of CFIUS, said that the investigation had "so far confirmed" the body's national security concerns.

Broadcom attempted a hostile takeover by purchasing proxy votes to install six friendly board members on Qualcomm's 11-member board when Qualcom rejected the offers.

The death of Broadcom's bid for Qualcomm at the hand of Donald Trump leaves a worrying fog for others to navigate.

Even as highly publicised deals such as the bid for Qualcomm by Singapore-based Broadcom, a chip maker for Apple and Chinese electronics manufacturers, run into trouble, asset purchases by Chinese buyers are still going through - and mostly out of the public eye, Wall Street deal makers said.

Qualcomm also has raised the specter of a long, hard regulatory review by global competition agencies, which could weaken the company just as 5G networks are rolling out.

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. The president blocked Canyon Bridge Capital Partners LLC's attempt to buy Lattice Semiconductor Corp., ignoring the firm's pledge to save jobs.

"Qualcomm has become well-known to, and trusted by, the US government", the Treasury Department said in a March 6 letter.

Only a few days ago, Broadcom's buyout bid was of such high concern to lawmakers that they asked federal regulators to review the proposed $117 billion deal-and unusual move considering the two companies haven't come to terms on a buyout deal.

Qualcomm shares were down 4.5% in after-hours trading to $59.98, while Broadcom shares were relatively flat at $265.

Other News

Trending Now

Nasa rift widens as Raila 'snubs' meet
They said they only learnt of it via the media and demanded a blow-by-blow account of what transpired at Harambee House on Friday last week.

Pilot Who Survived NY Helicopter Crash Is From Connecticut
The pilot freed himself and was rescued and later was treated and released in good condition from a hospital, police said. The company referred inquiries to authorities, saying it was focused on the victims' families and the investigation.

Putin Tries to Blame the Jews
He arrived at the Olympic venue in Sochi with Olympic officials shortly afterwards, he said. U.S. lawmakers and Jewish groups are among those criticising him.

Facebook to exclusively stream 25 Major League Baseball games in 2018
It has been doing that since May past year but Facebook didn't have the exclusive rights back then that it has been awarded now. With its recent licensing deal with Warner Music Group, Facebook now allows its users to use, upload, and share music ...

Colombian gov't to resume peace talks with guerrilla group ELN
It fielded 74 legislative candidates but got only 0.22 percent of votes for the lower house and just 0.35 percent in the Senate. The group could possibly still win support from poor, rural communities which lack good roads, schools and basic services.

Ohio State No. 17 In AP Poll Heading To NCAA Tournament
Four players are averaging at least 9.3 points per game for South Dakota State, they are Mike Daum (10.4), David Jenkins Jr. The Buckeyes (24-8) are making their 28th NCAA Tournament appearance and finished tied for second in the Big 10 standings.

Raiders to release cornerback Sean Smith, who's reportedly headed to jail
Smith was arrested for causing "great bodily injury" related to an altercation in Pasadena past year , the report said. Add on Smith's 2018 workout bonus of $250,000, and the Raiders add $8.5 million to their $15.8 million in cap space.