White House ends Broadcom bid for Qualcomm, citing security concerns

Tuesday 13 March 2018 | 08:53 CET | News

The US government will not allow the takeover of Qualcomm by Broadcom, due to national security concerns, according to a statement from the White House. An order signed by US President Donald Trump said there was "credible evidence" that Broadcom, a company based in Singapore, by exercising control over Qualcomm, "might take action that threatens to impair the national security of the United States". 

In reaction to the news, Broadcom said it was reviewing the order and that it strongly disagrees that the proposed acquisition raises any national security concerns. 

Broadcom launched its hostile bid of USD 130 billion for Qualcomm last November and was soundly rejected, also with a later sweetened offer. In late February, Broadcom lowered its bid after Qualcomm upped its takeover offer for NXP Semiconductors. 

Under pressure from shareholders, Qualcomm later said it was negotiating with Broadcom and was getting ready for due diligence. A few weeks later, the US government told Qualcomm to suspend its AGM while it looked into national security concerns about the takeover. The AGM was set to consider a new slate of directors proposed by Broadcom. 

To support its bid, Broadcom said it would invest USD 1.5 billion to train engineers in the US and make the country a leader in 5G. The company also was set to vote with shareholders on a plan to return its company seat to the US from Singapore. 

With the latest order, Qualcomm may not accept the nomination of Broadcom directors on its board and Broadcom must immediately and permanently abandon all takeover plans. Both companies will have to regularly show their compliance to this order, to the Committee on Foreign Investment in the United States (CFIUS). 

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

::: add a comment