https://www.foxbusiness.com/features/trump-blocks-broadcoms-117b-bid-for-qualcomm
Trump blocks Broadcom’s $117B bid for Qualcomm
Thomas BarrabiPublished March 12, 2018
President Donald Trump on Monday blocked Singapore-based Broadcom’s $117
billion bid to acquire Qualcomm on national security grounds, scuttling one of
the tech industry’s largest hostile takeover attempts in history.
“There is credible evidence that leads me to believe that Broadcom
Limited…through exercising control of Qualcomm Incorporated, a Delaware
Corporation, might take action that threatens to impair the national security
in the United States,” Trump wrote in an executive order on Monday.
“The proposed takeover of Qualcomm by the purchaser is prohibited, and any
substantially equivalent merger, acquisition, or takeover, whether effected
directly or indirectly, is also prohibited,” the order added.
Trump’s order came shortly after the Committee on Foreign Investment in the
United States (CFIUS) said in a letter to both companies that the deal posed
national security concerns. CFIUS noted that Broadcom had violated its rules
“on at least three separate occasions,” including when it recently moved to
relocate its headquarters to the United States without providing proper notice
to the committee.
Broadcom had planned to hold a shareholder vote later this month that would
expedite the planned move, which company officials pursued in part to assuage
national security concerns. The vote, if approved, would have allowed Broadcom
to formally relocate by April, the New York Times reported.
“Broadcom's proposal to acquire Qualcomm has always been premised on the
completion of Broadcom's previously announced plan to redomicile,” the company
said in a statement on Monday. “In short, U.S. national security concerns are
not a risk to closing, as Broadcom never plans to acquire Qualcomm before it
completes redomiciliation.”
A leader in wireless technology, including burgeoning fields such as 5G
connectivity, Qualcomm had rejected Broadcom’s bids for purchase. The U.S.
government scrutinized the takeover attempt because Qualcomm performs work for
federal agencies.
"This decision is based on the facts and national security sensitivities
related to this particular transaction only and is not intended to make any
other statement about Broadcom or its employees, including its thousands of
hard working and highly skilled U.S. employees," U.S. Treasury Secretary Steve
Mnuchin said in a statement. "The CFIUS process focuses exclusively on
identifying and addressing national security concerns. This focused mandate
reinforces our commitment to welcoming foreign investment, while at the same
time reinforcing our commitment to protecting national security."
This story has been updated.