Trump halts Broadcoms' bid for Qualcomm claiming national security is at risk

Trump halts Broadcoms' bid for Qualcomm claiming national security is at risk
Claiming that an acquisition of San Diego based Qualcomm by Broadcom is a national security risk, President Donald J. Trump has blocked the transaction from taking place. Earlier this month, the U.S. Treasury's Committee on Foreign Investment in the United States (CFIUS) issued an extraordinary letter complaining that if a foreign company took over Qualcomm, it would damage U.S. participation in the production of components for the next-generation 5G wireless networks. Qualcomm, well known for its mobile chips, already has a number of phone manufacturers lined up to use its Snapdragon X50 5G NR modem.

Earlier this morning, Broadcom moved up the date when it would become an American company domiciled in Delaware from early May to April 3rd. Currently, the company is located in Singapore. On April 5th, Qualcomm stockholders were to vote on their company's 11-seat Board of Directors. Broadcom had a slate of six candidates nominated, just enough to possibly take control of the board, and rubber stamp the transaction. The order from Trump cancels this proxy battle and orders the two chipmakers to abandon the proposed transaction. Broadcom's $117 billion offer ($79 a share) is no more.


Had the deal gone through, it would have been the largest tech merger in history. But investors had been wary from the start. Since the deal was announced, Qualcomm's shares never broke $67. That is considered a huge discount from Broadcom's bid, especially since it featured a huge cash component. Tonight, with the news out, Qualcomm's shares are down nearly 3.8% to $60.43. Broadcom's stock is up .75% to $264.80.

While Broadcom's bid was active, its attempt to buy Qualcomm became the biggest soap opera on Wall Street. And as all of this was going on between Broadcom and Qualcomm, the latter was trying to complete its own takeover of NXP Semiconductors, a deal now valued at $44 billion ($127.50 a share).

source: CNBC

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44 Comments

1. mootu

Posts: 1269; Member since: Mar 16, 2017

The orange idiot just has it in for any Chinese company. What's he going to do when he realises that Qualcomms 5G modem was developed in conjunction with Huawei?.

8. kabiluddin

Posts: 273; Member since: Feb 28, 2015

The orange idiot just did something good. Broadcoms taking over Qualcomm is very bad for the whole industry.

9. PenTiltoKet

Posts: 552; Member since: May 18, 2016

Agree.. He did good!!! For a wrong reason....

13. neela_akaash

Posts: 1239; Member since: Aug 05, 2014

If Mr. Trump removes all the outsiders from the Country (i.e. Elon Musk, Sundar Pichai, Satya Nadela etc.), the USA will be doomed.

20. sgodsell

Posts: 6594; Member since: Mar 16, 2013

Now look who is the idiot with a post like yours. When did he ever say anything like that? Yeah, look who is racist now.

34. perry1234

Posts: 613; Member since: Aug 14, 2012

Let it be. It will be a reverse brain-drain leading to the prosperity of the countries these people actually belong to.

35. phonearenarocks

Posts: 602; Member since: Mar 26, 2015

Exactly, though i was the only guy who was unhappy! I have company now :)

17. Dr.Phil

Posts: 2209; Member since: Feb 14, 2011

That's a pretty hyperbolic statement. Qualcomm's 5G modem was not "developed in conjunction" with Huawei. What they did was test their two respective 5G modems to comply with certain global standards for 5G. In other words: Qualcomm developed a 5G modem and Huawei developed a 5G modem separately from each other. Then, they came together and performed testing to make sure their chipsets were meeting global standards. That DOES NOT mean they collaborated on the design or manufacture of their respective chipsets. They were simply trying to validate that each was working towards the same standard goals in providing 5G support.

27. mootu

Posts: 1269; Member since: Mar 16, 2017

Actually it wasn't. The testing was to ensure that the Qualcomm modem works correctly on Huawei's 5G network and the two company's collaborate more than you would think. Qualcomm have to develop it's modems to work on Huawei's networks as Huawei are the worlds largest wireless network builders. https://www.qualcomm.com/news/releases/2018/02/21/qualcomm-and-huawei-successfully-complete-3gpp-based-5g-interoperability But according to the US Gov no US company can work with Huawei, but obviously they are doing so.

42. Dr.Phil

Posts: 2209; Member since: Feb 14, 2011

Did you not read your own sourced article? They TESTED the 5G modems which is EXACTLY what I just stated in my comment. They did NOT develop their modems in tandem with each other. The source article does not mention that they developed the modems together, but rather that they TESTED them to make sure they worked to the SAME international standards.

44. mootu

Posts: 1269; Member since: Mar 16, 2017

And you need to read it again, There is no mention of a Huawei modem in the article, the whole article is about the testing of Qualcomms modem for compatibility on Huawei's 5G commercial systems.

18. Nine1Sickness

Posts: 886; Member since: Jan 30, 2011

I am by no means a Trump fan, but this was a good move by Trump.

2. dnomadic

Posts: 351; Member since: Feb 20, 2015

I wish Google would buy Qualcomm and its patents. They need to develop chips specifically for Android and they are in a good position to capitalize of the sell of chips though I’m certain any attempt by Google to purchase Qualcomm would be met with HEAVY skepticism and would be eventually blocked.

16. Dr.Phil

Posts: 2209; Member since: Feb 14, 2011

You're right that it would be met with heavy skepticism. Have you not seen how large of a company Google already is? And you want them to buyout a large chipset manufacturer too? Talk about a monopoly. I think that deal would be dead in the water before it was even rumored.

22. sgodsell

Posts: 6594; Member since: Mar 16, 2013

Just in case you didn't realize. As it stands today the vast majority of Qualcomm's SoCs are used in Android devices. The other issue is Qualcomm holds patents and technology that is used in every smartphone, tablets, and smart watches.

30. MANOFSTEEL

Posts: 126; Member since: Nov 25, 2015

As long they don't do the same thing they did to Motorola is fine

3. RebelwithoutaClue

Posts: 5467; Member since: Apr 05, 2013

So Singapore is now on the list of suspicious countries as well. Nothing to do with the fact that Intel (a US company) has shown interest in Qualcomm as well.

38. sgodsell

Posts: 6594; Member since: Mar 16, 2013

Broadcom is actually owned indirectly by a Chinese company.

39. RebelwithoutaClue

Posts: 5467; Member since: Apr 05, 2013

Any proof of that?

4. Cat97

Posts: 1618; Member since: Mar 02, 2017

I think this block is actually in US interest. NSA needs control over worldwide communications at a hardware level, just like they did a few years ago when they had loopholes in most servers via both hardware and software.

5. PhoenixFirebird

Posts: 112; Member since: Oct 10, 2016

Wahaha

6. Martin_Cooper

Posts: 1774; Member since: Jul 30, 2013

When none of your buddies are not going to make any money from a record deal you block it and call it national security. It's the same guy that labeled half of middle east terrorist states but miraculously the only two countries where he does business, Saudi Arabia and Egypt have not been flagged. Not to mention almost every single 9/11 terrorist was from SA. But hey its Murica.

37. LumiaLover

Posts: 237; Member since: Sep 27, 2012

The same guy...who? Trump was responsible for draining the swamp in Saudi Arabia. You need to do some research mate and realise that love him or hate him, Donald Trump is going to go down as the greatest POTUS in history. He has seen his country decimated by globalism and he has been consistent in his message over many years. He may not be the best politician, but his intentions are good for America and the World.

7. wesley.

Posts: 202; Member since: Aug 06, 2013

This is a good thing for all consumers.

10. PenTiltoKet

Posts: 552; Member since: May 18, 2016

He might not realize about this....

12. zennacko unregistered

What's the point of owning a business based in the US if the government puts its golden kibosh on any attempt to sell the business to a foreign investor or group?

14. Subie

Posts: 2232; Member since: Aug 01, 2015

Except in this case Qualcomm wasn't trying to sell. Broadcom was going for a hostile takover.

15. zunaidahmed

Posts: 1182; Member since: Dec 24, 2011

Doubt that was the case.....if they weren’t selling, broadcom can’t buy,

19. Alan01

Posts: 560; Member since: Mar 21, 2012

Not true. Broadcom was trying a proxy battle in order to take over the majority of Qualcomm's board. Many on Wall Street felt that if the Treasury hadn't forced Qualcomm to push back the vote by a month, Broadcom would have controlled 6 of the 11 seats on the board and would have rubber stamped the acquisition. Regards, Alan Friedman

32. tedkord

Posts: 16979; Member since: Jun 17, 2009

You don't seem to understand how big business works.

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