Broadcom withdraws $121b bid for Qualcomm

Broadcom withdraws $121b bid for Qualcomm

USA chipmaker Qualcomm managed to escape a $117 billion takeover by Singaporean rival Broadcom, thanks to intervention from the White House.

Trump's order echoed that concern, saying a takeover by Broadcom "threatens to impair the national security of the United States".

Broadcom said it had withdrawn its candidates for the board of directors of Qualcomm, which it had hoped shareholders would elect to endorse the $117 billion deal that would have been the biggest mergers in the tech sector.

The move by Trump was a rare intervention by a president, but under his administration, multiple deals have been quashed after a review by the panel, the Committee on Foreign Investment in the United States, popularly known as CFIUS.

Decision by the President for forbidding the blockbuster agreement underscored the lengths and is willing to go for sheltering the Americans companies from the foreign competition.

Broadcom in Cambridge is anchored on the Science Park while Qualcomm is based at Cambridge Business Park just across the road.

As chipmaker Broadcom was stepping up its efforts to acquire rival Qualcomm via a hostile takeover, industry giant Intel has been closely watching developments with an eye toward possibly acquiring Broadcom. But the White House feels that the risk of America losing clout in 5G technology and similar fields rises to the level of a national security threat.




"Although we are disappointed with this outcome, Broadcom will comply with the order".

But Washington has offered only scant evidence that Broadcom's purchase would endanger national security.

But if the decision was prompted by Trump's deep skepticism about global trade and Fortress America instincts, that is less defensible and could haunt USA companies in their worldwide dealings.

Broadcom CEO Hock Tan had seized on Qualcomm's legal headaches in his attempt to persuade the USA government to keep the deal alive. Qualcomm had rejected Broadcom's unsolicited offer in February before the government stepped in. The Singaporean company said in a statement after that report that the probe is not directly related to the Qualcomm bid.

As of now, it is not clear if such a move from the Singapore-based company will win Trump's approval.

The members of CFIUS include the heads of the Departments of the Treasury (chair), Justice, Homeland Security, Commerce, Defense, State, Energy, the Office of the U.S. Trade Representative, and the Office of Science & Technology Policy.

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