Trump blocks Broadcom's takeover of Qualcomm

US President Donald Trump

Trump said late Monday that a takeover of Qualcomm would imperil national security, ending Broadcom's $117 billion buyout bid.

It fended off antitrust concerns around the globe over its intellectual property strategies, taking the biggest share of wireless royalties in the 3G and 4G eras and getting a head start on next decade's 5G era, which promises to embed wireless connections in cars, factories, homes and cities.

Also of note, China's minister for information technology said in an interview last week that the country is already preparing for the development of 6G technologies.

Qualcomm shares had fallen 5.2 percent to $59.55 at 0930 EDT on March 13, while Broadcom shares rose 1.5 percent to $266.93.

The last deal Mr. Trump blocked was Chinese government-backed Canyon Bridge Capital Partners' attempt to buy Portland, Ore. -based Lattice Semiconductor Corp.

Broadcom could not be immediately reached for comment. He described the CFIUS communication to Broadcom as "unprecedented".


"If Broadcom completes its redomiciling in the U.S.in a way that extinguishes any non-U.S. ownership or control, then I think they can open the door to many, if not all, acquisitions. they would effectively no longer be subject to a CFIUS-initiated review or investigation", said Guillermo Christensen, a lawyer who works on CFIUS issues at Brown Rudnick in Washington.

The move had little precedent.

The CFIUS panel itself had also initially been divided over whether it had the right to commence its review before the deal was signed, with representatives from the Departments of Justice, Homeland Security, Defense and Energy urging CFIUS to begin its review of the deal before Qualcomm shareholders went to vote on the slate of directors that included Broadcom's nominees, according to people familiar with the matter.

The move by Mr Trump to kill the deal comes only months after the United States president himself stood next to Broadcom chief executive Tan Hock Eng at the White House, announcing the company's decision to move its headquarters to the U.S. and calling it "one of the really great, great companies". Tan "a great, great executive" and said Broadcom was "one of the really great, great companies".

Two analysts said Xilinx and Mellanox would be a good fit for Broadcom, though not as transformational as Qualcomm.

But with Broadcom playing countless takeover-related tricks to move closer and closer to being able to buy Qualcomm, the White House and Trump administration has stepped in to block it all.

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