Broadcom drops Qualcomm takeover attempt following Trump order


Qualcomm Inc. San Jose California

Singapore-based Broadcom Ltd withdrew its $117 billion bid to acquire Qualcomm Inc on Wednesday, two days after U.S. President Donald Trump blocked the attempt citing national security concerns.

Trump's order echoed that concern, saying a takeover by Broadcom "threatens to impair the national security of the United States".

In a statement, Broadcom said it has terminated its offer to acquire Qualcomm and withdrawn its slate of independent director nominees for Qualcomm's next board. 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.

Qualcomm's chip technology is critical to the development of US smartphone communications infrastructure and other digital devices.

The Presidential order is seen as a move to shelter United States companies from foreign competition.

Lobbying by chip giant Intel, which was wary of a Qualcomm-Broadcom merger, is said to have played a role in the scuttling of the deal.

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President Donald Trump hugs Broadcom CEO Hock Tan as Tan announces the repatriation of his company's headquarters to the United States from Singapore during a ceremony in the Oval Office of the White House on November 2, 2017. And if the acquisition had gone through, then it would be the largest technology deal made in the pages of history.

Treasury Secretary Steven Mnuchin, in his capacity as the chair of the CFIUS, said Trump's decision was consistent with the administration's commitment to take all actions necessary to protect the national security of the US.

Qualcomm, which is the dominant maker of microprocessors for smartphones, had rejected the unsolicited offers from Broadcom, which makes an array of chips for wireless communications, set-top boxes and electronic displays.

"Although we are disappointed with this outcome, Broadcom will comply" with the order blocking its effort to buy Qualcomm, it said in a statement.

But if 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.

"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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