President Trump signs executive order blocking Broadcom's acquisition of Qualcomm

President Trump signs executive order blocking Broadcom's acquisition of Qualcomm

President Donald Trump blocked Singapore-based Broadcom Limited's planned takeover of USA chip maker Qualcomm Monday after an investigation determined the foreign company "might take action that threatens to impair the national security of the United States".

The odds of a completed deal were already low after the Committee on Foreign Investment in the USA ordered a 30-day stay in Broadcom's attempt to overturn a majority of the board of Qualcomm and force the company into negotiations on its $100 billion offer.

Although the particular deal is complicated by the fact that Broadcom is based in Singapore, the more important issue is actually to have companies in the USA "get stronger and stronger" rather than getting diluted by the combination of two very large companies, Krosby told CNBC.

Rep. Duncan Hunter, (R-Calif.), on national security concerns over Broadcom's bid for Qualcomm and reports that North Korea is open to talks with the U.S.

Singapore-based Broadcom had submitted bids ranging from $103 billion to as much as $130 billion. Both companies are required to go through and finalize the process that signifies the proposed takeover has been abandoned, which includes getting a written certification that such a deal has been stopped. While Broadcom's bid was active, its attempt to buy Qualcomm became the biggest soap opera on Wall Street.

Trump's move accelerated a decision that appeared likely after CFIUS told Broadcom in a letter on Sunday that its investigation "so far confirmed the national security concerns".

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Qualcomm shareholders are now scheduled to vote April 5 on whether to elect six Broadcom nominees to Qualcomm's 11-member board of directors, which would give Broadcom candidates majority control.

So it would be surprising if CFIUS's authority was overturned at this stage, said Brian Fleming, a lawyer with Miller & Chevalier and former Assistant Attorney General for National Security who managed CFIUS matters for the Department of Justice.

"The revelation that Intel Corp.is considering buying Broadcom Ltd., a company valued at more than $100 billion, shows the depth to which the chip giant feels threatened by a potential tie-up between Broadcom and its rival Qualcomm Inc.", the paper reported yesterday. Broadcom's $117 billion offer ($79 a share) is no more.

The American government's increased scrutiny of foreign transactions generally has made it more hard for Chinese companies to buy USA assets, analysts have said.

President Donald Trump will not let Broadcom proceed with a blockbuster hostile takeover of Qualcomm. Jack Ma's pledge to create 1 million U.S.jobs didn't help his Ant Financial's attempted takeover of MoneyGram International Inc., which collapsed amid CFIUS opposition. On the other hand, China's Huawei has been making commercial yes with big telecom operators across Europe and Asia, focusing on becoming a lead in the race for 5G networks, regardless of the concerns that were proposed by the United States.

Qualcomm shares were down 4.5% in after-hours trading to $59.98, while Broadcom shares were relatively flat at $265.

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