Trump blocks $140bn Qualcomm takeover bid
WASHINGTON, March 13, 2018
US President Donald Trump has blocked a planned takeover of chipmaker Qualcomm by Singapore-based rival Broadcom on grounds of national security.
His order cited "credible evidence" that the proposed $140 billion takeover "threatens to impair the national security of the US", said a BBC report.
Qualcomm was already trying to fend off Broadcom's bid. Broadcom said it strongly disagreed that its proposed takeover gave any cause for concern.
The presidential order said: "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."
A Qualcomm statement said the company today received a Presidential Order to immediately and permanently abandon the proposed takeover of Qualcomm by Broadcom Limited.
"Under the terms of the Presidential Order, all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm," said the statement.
Qualcomm was also ordered to reconvene its 2018 annual meeting of stockholders on the earliest possible date, which based on the required 10-day notice period, is March 23, 2018. Stockholders of record on January 8, 2018 will be entitled to vote at the meeting, it said.
Qualcomm invents breakthrough technologies that transform how the world connects and communicates. "When we connected the phone to the Internet, the mobile revolution was born. Today, our inventions are the foundation for life-changing products, experiences, and industries. As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables," it said.
The deal would have created the world's third-largest maker of microchips, behind Intel and Samsung. It would also have been the biggest takeover the technology sector had ever seen.
The chipmaking sector is in a race to develop chips for the latest 5G wireless technology and Qualcomm is considered to be a leader in this field, followed by Broadcom and China's telecoms giant Huawei.
Analysts said a deal between Qualcomm and Broadcom could have given Huawei the chance to take over the top spot in years to come - a situation US politicians wanted to prevent given their ongoing security concerns around Chinese telecom firms doing business with US carriers.
