And just like that, President Donald Trump killed Broadcom’s proposed hostile takeover of Qualcomm.
On Monday evening, Trump issued an executive order that prohibits Broadcom from acquiring the chipmaker for roughly $117 billion, citing national security concerns. As part of the order, all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm.
In a statement, Broadcom said it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns.”
The president based his decision on “credible evidence” that caused him to believe that Broadcom — if able to purchase Qualcomm — “might take action that threatens to impair the national security of the United States.” If the acquisition had gone through, it would have been the largest tech deal in history.
Although Broadcom is based in Singapore, it was reportedly China that was Trump’s main cause for concern. The deal would require an American technology company to cede its control in the semiconductor and wireless industry. Just several months ago, however, Trump was touting Broadcom’s return to the United States as an example of a Fortune 100 company bringing back jobs to the country.
This is a rather unusual move that certainly raises questions around how far the Trump administration is willing to go to defend its protectionist policies and whether intervening in the private sector will become a norm.
My colleague Jonathan Vanian reports further:
Daniel Ives of GBH Insights said in a research note that while Broadcom could potentially challenge the order, it’s not likely to make a difference. He wrote that “the Trump edict essentially kills any chances of this deal happening and is a major gut punch to those Qualcomm bulls hoping this soap opera could end with a bid following pressure from the shareholder meeting, which is poised to happen next month after getting delayed.”
“While Qualcomm still remains an M&A candidate for another chip player, this deal dissolving is a clear positive for Intel which is in a further position of strength with the potential marriage of Broadcom and Qualcomm now broken up by the Beltway before it even got to the altar,” Ives wrote.
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