Published: Thu, March 15, 2018
Business | By Tara Barton

Broadcom officialy ends Qualcomm takeover following White House intervention

Broadcom officialy ends Qualcomm takeover following White House intervention

After a tumultuous few months of effort, Broadcom has officially signalled on March 14 that it will now longer pursue an acquisition of rival chip vendor Qualcomm. Specifically, the order says Broadcom cannot suggest Qualcomm board members in order to stack takeover odds in their favor, nor can they "purchase or merge" with Qualcomm in any way.

Regardless of President Trump's intentions, his order is certainly unfortunate news for Broadcom as well as Qualcomm's stockholders.

Although Broadcom is incorporated and based in Singapore, CEO Hock Tan announced late previous year while visiting Trump at the White House that the company would return its corporate headquarters to the United States, likely using San Jose as a base. The goal for Broadcom was nothing less than to remake the networking and mobile chip markets, as 5G adoption looms.

Sources had told Reuters on Tuesday that Broadcom was ready to scrap its bid for Qualcomm.

Being based in the United States as opposed to Singapore should make it easier for Broadcom to make acquisitions of USA companies without falling under the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).

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Broadcom's ambitions sparked US government concerns over which country will dominate the technology, as well as fears over national security. "Articulation of the potential national security concerns, in significant part is classified".

Earlier this month, the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments in USA companies, cited concerns about the proposed Broadcom-Qualcomm marriage.

Broadcom Ltd. said Wednesday that it was disappointed with Pres. Trump's decision.

Broadcom had planned to move its headquarters from Singapore to the U.S. on April 3, one month before the date it had announced as part of the agreement to buy Qualcomm.

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