Qualcomm: Donald Trump blocks Broadcom takeover bid over security concerns

Inc. All rights reserved. This material may not be published broadcast rewritten or redistributed

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 Accident victim made to use severed leg as pillow in hospital
Mar 12, 2018 - 09:28
A government spokesperson said chief minister Yogi Adityanath "has announced a financial assistance of Rs 2 lakh" for the youth. A man has been filmed using his own left foot as a pillow after doctors amputated it when he was involved in a bus crash .

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 Congress announces Rajya Sabha candidates, places a check on Siddaramaiah
Mar 12, 2018 - 09:25
Santosh Kumar has been a close associate of the Chief Minister taking care of the latter's daily activities for the last 17 years. Elections will be held for the three seats on March 23, if the Congress does not withdraw its candidate P.

isis-killer-beheading-video-story-top Watch the best bits of Elon Musk's SXSW talk
Mar 12, 2018 - 09:24
He also predicted a utopian social model for the red planet, akin to the ancient Greek republics, without the slavery. Today he specifically cited the risk of a Third World War and its aftermath.

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 Paralympics: Two Koreas to march separately at Pyeongchang opening ceremony
Mar 12, 2018 - 09:20
A record 567 athletes from 48 countries, plus the Neutral Paralympic Athlete delegation, will compete at the Games. The Poles kick off their Olympic campaign on Saturday, competing in Alpine skiing and the biathlon.

isis-killer-beheading-video-story-top Kisan Long March In Mumbai: Traffic Advisory Released By Police
Mar 12, 2018 - 09:20
He had led the farmers' strike past year which led to the blocking of milk and vegetable supplies to the cities for few days. In the backdrop of the agitation, chief minister Devendra Fadnavis held a meeting of all senior officials on Sunday evening.

isis-killer-beheading-video-story-top Gunrunner accused of Gauri murder
Mar 11, 2018 - 01:54
Kumar's police custody has been extended until 13 March while the next hearing in the case will be on Tuesday (12 March). Bengaluru Police on Friday claimed a major breakthrough in the sensational murder of senior journalist Gauri Lankesh .

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 .

Browns ship DeShone Kizer to the Packers
Mar 11, 2018 - 01:51
Randall was the 30th overall pick in 2015 and 10 interceptions in 39 games, 30 of which were starts. The teams also swapped picks in the fourth and fifth rounds, according to ESPN's Adam Schefter .

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 Donald Trump to get military parade, but no tanks
Mar 11, 2018 - 01:50
Trump was apparently inspired to throw a military parade after attending France's Bastille Day celebration in France a year ago . The organizers also call for veterans to wear different periods' uniforms and perform reenactments.

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 Meghan Markle Steps Out In Another Perfect Autumn Look
Mar 11, 2018 - 01:39
Meghan warmly greeted the crowd, crouching down to talk and hug children who were waiting outside to meet her. "Meghan told me that I can achieve whatever I want to achieve".

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.