Donald Trump kills off Broadcom's takeover bid for Qualcomm

Trump blocks Broadcom's bid for Qualcomm addressing concerns of National Security

It's hard to see a path to this deal taking place following Trump's actions with the executive order.

Last week, it was speculated that Intel could take advantage of the offer to bid for Broadcom.

In response to Trump's decision, Broadcom has said it is reviewing the case and "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns".

5G is considered a national security priority by the White House (Tech Crunch). Broadcom blasted the delay as lowly "engagement theater".

Qualcomm and Broadcom did not immediately respond to requests for comment Monday night. After the meeting, CFIUS approved Broadcom's takeover of Brocade Communications Systems, conditioned on the headquarters move, according to Broadcom.

While Huawei wasn't a part of the deal and didn't try to make a run at Qualcomm or Broadcom, there's growing concern in the us that China is gaining too much control over the mobile Internet infrastructure and other components that the U.S.is increasingly relying upon.

Aside from Qualcomm and Broadcom, there are two other manufacturers that are no doubt following this development with interest.

The takeover, which would have been the largest transaction the technology industry had ever seen, was tripped up by concerns that it posed a threat to American competitiveness in mobile technology by putting one of the largest mobile chip makers in the US under the control of a company based in Asia.

"Under the terms of the presidential order, all of Broadcom's director nominees are also disqualified from standing for election as directors of Qualcomm", the California-based company said in a statement.

Trump says that there is a "credible evidence" that Broadcom "might take action that threatens to impair the national security of the United States." .

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".Trump sent a clear signal to overseas investors: Any deal that could give China an edge in critical technology will be swatted down in the name of national security, "Bloomberg's David McLaughlin and Saleha Mohsin said".

If the companies drag their feet on unwinding this tangle, the Attorney General is instructed to enforce this order by "any steps necessary".

During the past couple of months, the news about the expected acquisition of Qualcomm Inc.

What's next for Broadcom and Qualcomm? In a direct threat to Qualcomm, Huawei's now designing its own chips.

For the second time in barely a fortnight, Donald Trump has cited "national security" to justify a significant decision affecting business.

Broadcom CEO Tan is a serial acquirer who has turned Avago, the small chipmaker he was running with a market value of just $3.5 billion in 2009, into a giant with a market capitalization of over $100 billion in less than a decade. There are many possible targets there, many of which would match well with Broadcom's existing product portfolio.

Across the table, Qualcomm got exactly what it wanted and can now focus on its pending merger with NXP Semiconductors (NASDAQ: NXPI). "The Chinese market is increasingly close to throwing up barriers to US companies and of course the American market is quite open to Chinese investment". To this amount we must add more than 25,000 million in debt.

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.

Intel shares stayed pretty much flat even after the announcement, trading at $51.90 per share.

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