Qualcomm: Donald Trump blocks Broadcom takeover bid over security concerns

Getty Images

Qualcomm quickly spurned its unsolicited suitor and continued to resist even after Broadcom raised its original offer from $103 billion.

According to a letter from Cfius seen by the Washington Post, the USA was concerned that Broadcom would cut back on research and development at Qualcomm following the takeover.

Qualcomm rejected Broadcom's $79 per share offer as too low, given its growth prospects from the expansion of cellular technology into other gadgets beyond smartphones and upcoming, ultra-fast 5G networks.

Congressman Duncan Hunter said that the merger would "damage American security" and had pointed at Broadcom's "increasing" ties with China to highlight his reservation about the deal. "A Chinese entity doesn't need to be anywhere near a transaction now in semiconductors for the deal to be nixed".

US President Donald Trump has blocked Broadcom's bid for Qualcomm on grounds of national security, putting an end to what would have been the technology industry's biggest deal ever. "It is US military power and economic power going forward and he's got a very consistent point of view", said Ron Napier, head of Napier Investment Advisors.

Qualcomm filed a copy of the CFIUS letter, dated Sunday, with the U.S. Securities and Exchange Commission Monday morning. Trump has blocked two in six months.

Trump said "there is credible evidence that leads me to believe that Broadcom Ltd." by acquiring San Diego-based chip-maker Qualcomm "might take action that threatens to impair the national security of the United States".

Broadcom shares closed the trading day up 3.5 per cent to $262.84 and gained slightly more in after-market trades.

Broadcom also criticized Qualcomm for asking for the CFIUS investigation.

Trump isn't the only hurdle to getting deals done.

The concerns on the latter front came to fruition a week ago when the Committee on Foreign Investment in the United States (CFIUS) asked Qualcomm to delay its planned March 6 annual shareholders meeting for 30 days, citing national security concerns.

"There's going to be a wake-up call once this passes", said Timothy Adams, president of the Washington-based Institute of International Finance.

The panel is headed by Treasury Secretary Steven Mnuchin.

The move by Trump to kill the deal comes only months after the USA president himself announced Broadcom's decision to move its headquarters to the United States and called it "one of the really great, great companies".

There's no indication of how long the abandonment process may take, but Qualcomm and Broadcom will have to provide the Committee on Foreign Investment in the USA with a weekly certification that they are going through any and all necessary steps for the completion of this process, and in addition to the weekly certifications they'll also need to include detailed documentation of what steps have been taken as of that certification date.

On Monday, Tan went to the Pentagon to meet with CFIUS officials in a bid to address their Qualcomm concerns.

As a result of the presidential order, Broadcom's purchase efforts are on hold for the time being, if not forever. Qualcomm is raising its takeover bid for NXP Semiconductors by almost 16 percent to about $43.22 billion, citing in part NXP's strong results since the companies first announced their merger in October 2016.

CFIUS had launched an investigation into the national security implications of the deal last week over concerns that it would hamper USA efforts to develop 5G wireless networks and other emerging technologies.

Related news:

Hot News

isis-killer-beheading-video-story-top Meghan Markle carries out first royal engagement with British Queen Elizabeth
Mar 13, 2018 - 11:17
Meghan Markle has made her biggest royal debut so far, her first outing with Queen Elizabeth . Following the #CommonwealthDay Service, TRH's & Ms.

isis-killer-beheading-video-story-top Auburn basketball a 4 seed in first NCAA tournament appearance since 2003
Mar 12, 2018 - 09:28
Like NMSU, Clemson is a good defensive team, ranking 29th in the country in points allowed at 65.8 points per game. The Auburn Tigers shared the SEC regular-season title then made a one-game exit in the SEC tournament.

isis-killer-beheading-video-story-top Dead After Turkish Plane Crashes In Iran
Mar 12, 2018 - 09:26
Turkish media say that the plane is owned by a major Turkish corporate group which is active in construction and other fields. His daughter, Mina Basaran, 28, had traveled to the United Arab Emirate to celebrate her coming wedding next month.

isis-killer-beheading-video-story-top Ashland Native to Appear on American Idol
Mar 12, 2018 - 09:26
When " American Idol " first aired, the original trio included Simon Cowell , Randy Jackson and Paula Abdul. It was Seacrest who hinted on Fox's May 2016 finale that there might be more " Idol " to come.

isis-killer-beheading-video-story-top Jordan Bone: Leads Vols to SEC Tournament Final
Mar 12, 2018 - 09:26
Wenyen Gabriel knocked down seven 3-pointers and led the Wildcats with 23 points in the win over the Crimson Tide Saturday. They took down Alabama 88-63 in the semifinals with Wenynen Gabriel nailing a flawless 7 of 7 from beyond the arc.

isis-killer-beheading-video-story-top Taylor Swift Releases "Delicate" Music Video
Mar 12, 2018 - 09:26
It officially impacts radio this week - and already holds Top 50 positions at pop and hot adult contemporary radio. Delicate is the fourth music video for a song off her Reputation album following Look What You Made Me Do , .

isis-killer-beheading-video-story-top Elizabeth Warren refuses DNA test to prove Native American heritage
Mar 12, 2018 - 09:25
She's making a cynical political play to have Native Americans back her story whether it's true or not. The DNA test would settle the issue once and for all.

isis-killer-beheading-video-story-top Casey wins Valspar as Woods finishes one stroke behind
Mar 12, 2018 - 09:24
That was his best finish since he tied for second at that Barclays tournament, right about the time his back started to give out. Brandt Snedeker , who was paired with Woods for the final two rounds at Valspar: "I can confirm he's back, the roars are back".

isis-killer-beheading-video-story-top China trade deficit figure overestimated by about 20 pct: commerce minister
Mar 12, 2018 - 09:22
This could be further cut by 35 per cent if the USA lifts the ban on high-tech exports to China, he added. China is not one of those nations.

isis-killer-beheading-video-story-top Browns trade DL Danny Shelton to Patriots for 2018 pick
Mar 11, 2018 - 01:52
According to ESPN , his "skill-set should fit well" in the Patriots' young, run-focused hybrid defense. Shelton , a three-year National Football League veteran, has one year remaining on his rookie deal.

isis-killer-beheading-video-story-top Richard Sherman meeting with 49ers
Mar 11, 2018 - 01:52
Condotta says that the team was interested in trying to get Sherman to agree to a pay cut but that he "balked" at such a proposal. San Francisco started the offseason with a $137.5 million pact with impending free agent Jimmy Garoppolo .

isis-killer-beheading-video-story-top Free agent CB Sherman to visit 49ers
Mar 11, 2018 - 01:51
Asked by Tom Pelissero of the NFL Network on Friday what he wants out of a new team, Sherman said: "Looking for a great fit". Carrie was the best cornerback the team had last season, he comes into the offseason as an unrestricted free agent.

isis-killer-beheading-video-story-top Crystal Palace boss Hodgson frustrated after comeback not enough for Chelsea defeat
Mar 11, 2018 - 01:50
Willian is a clear contender to be the club's player of the season come May, which would be the second time he had won the award. Palace has lost its last three Premier League games and hasn't won since a 1-0 victory over Burnley on January 13.

isis-killer-beheading-video-story-top Facebook reaches exclusive deal to stream 25 MLB games
Mar 10, 2018 - 01:53
The first game to air will reportedly be an April 4th matchup between the Mets and Phillies , (feel. the. excitement!). Facebook said Friday that recorded broadcasts will also be available globally, excluding select global markets.

isis-killer-beheading-video-story-top Supreme Court Sets Aside Kerala High Court Order Annulling Hadiya's Marriage
Mar 10, 2018 - 01:51
Senior Advocate Kapil Sibal, who appeared for Jahan, requested the court to not take any of the NIA's arguments at face value. What the Court also mentions is that the Judgement will not affect any ongoing investigations by the NIA.