Donald Trump Kills Broadcom's $117B Qualcomm Bid: Here's Why

Ann Santiago
March 17, 2018

President Donald Trump's extraordinary decision Monday to block Singapore-based Broadcom from pursuing a hostile takeover of San Diego-based Qualcomm because he sees the deal as a threat to USA national security will be cheered by the Qualcomm executives who opposed the bid and welcomed by the 13,000 local Qualcomm workers whose jobs may have been in jeopardy with a new owner.

President Trump's order prohibiting Broadcom from taking over Qualcomm is all about China, especially Huawei.

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

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On the other hand, in a statement late Monday, Broadcom said it is now reviewing the order, but it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns". "The importance of @Qualcomm's research into 5G technology and how it relates to our future can not be understated".

In an attempt to ease those worries, Broadcom last week pledged to make the USA a leader in the race to build 5G networks, saying it would create a $1.5 billion fund to support the effort if took control of Qualcomm.


In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in US telecom infrastructure, which could lead to spying or cybertheft.

With the Oval Office killing the deal, Broadcom officially cancelled its bid on Wednesday and withdrew from a proxy war to fill Qualcomm's board of directors with its roster of nominees.

The US Treasury Department (which leads the Committee on Foreign Investment in the US) claims the Broadcom/Qualcomm threatens Qualcomm's future leadership within the next generation of wireless technology. Singapore-based Broadcom, on the other hand, disagrees with Trump's decision, saying its acquisition of Qualcomm does not pose any security risk. Qualcomm had rejected Broadcom's unsolicited offer in February before the government stepped in. So much so, that Intel was rumored to be looking into acquiring Broadcom to prevent the Qualcomm deal. Unlike Qualcomm, Tan said, Broadcom financed its innovation through "lawful practices".

Broadcom also tried to curry favor by moving its legal headquarters from Singapore to the U.S within the next few weeks.

As of now, it is not clear if such a move from the Singapore-based company will win Trump's approval. In September, Trump blocked a Chinese state-owned company from acquiring an American semiconductor firm.

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