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

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

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

If Intel were to acquire Broadcom, the semiconductor maker would gain entry into a market that it has been struggling to find a toe-hold in - wireless handsets.

USA regulators have in recent weeks expressed concerns that the takeover could cause the United States to fall behind China in the race to develop 5G networks. It sees 5G as a fresh start to make a bigger mark in the mobile world, but likely didn't want to compete against the combined might of Broadcom and Qualcomm.

Xilinx and Mellanox would be a good fit for Broadcom, though not as a transformational level like Qualcomm. The order also prevents Broadcom's proposed candidates to run for Qualcomm's (NASDAQ: QCOM) board of directors. Broadcom is known for cutting R&D to boost short-term profits. "Semiconductor technology and companies like Qualcomm will be an important weapon in that 5G arms race [and] the United States like other nations and regions want to be first".

CFIUS had already sent letters to the lawyers of both the companies concerned, especially regarding Broadcom's practice of reducing research expenditure, along with some national security problems.

Qualcomm shareholders were set to vote last week on whether to replace six of its 11 directors with Broadcom candidates when the CFIUS delayed the scheduled board meeting to review the takeover.

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She signed a criminal citation with a promise to appear in court at a later date and was released to her fiancee. Police said one person sustained minor injuries and was transported to a local hospital.

Broadcom said Monday it is reviewing the administration's order, adding that it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns".

The computer chip makers must "immediately and permanently abandon the proposed takeover", Trump said in a presidential order on Monday.

Broadcom released a statement shortly before Trump blocked the offer saying that if the two companies did merge, that the headquarters could relocate to the US, instead of the current Broadcom headquarters in Singapore.

This move will help Qualcomm relax a bit, but it's hard to tell whether it will hurt or help its pending acquisition of NXP. The company is in the process of moving its headquarters from Singapore to the United States and plans to complete the process by April 3rd. For one thing, it is only going to become harder for foreign tech companies - not just Chinese - to acquire United States technology businesses as the White House appears receptive to any argument around the diminution of American corporate might. If Broadcom fails to get approval even after shifting the headquarters, then the company would possibly take the matter to court. Even Barack Obama blocked a technology acquisition by a Chinese investment fund citing similar concerns, notes the BBC. "As the State Department Web site notes, the United States and Singapore have long enjoyed 'an expansive and enduring relationship based on mutual economic interests, robust security and defense cooperation.' When the president comes to San Diego on Tuesday, an explanation of his decision is needed - not just by residents but by nations that see themselves as USA allies". Earlier, the president blocked the sale of Lattice Semiconductor (NASDAQ:LSCC) to a Chinese-backed firm, as well as the sale of money transfer company Moneygram (NASDAQ:MGI) to a company affiliated with Chinese e-commerce giant Alibaba (NYSE:BABA).

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