President Donald Trump will not let Broadcom proceed with a blockbuster hostile takeover of Qualcomm.
Trump issued an executive order on Monday that prohibits Broadcom from acquiring Qualcomm for roughly $117 billion, citing national security concerns.
“The proposed takeover of Qualcomm (QCOM)by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited,” the executive order, signed by Trump, said.
The order also said that Broadcom’s (AVGO) 15 proposed candidates to Qualcomm’s board of directors have been “disqualified,” Qualcomm has previously rejected Broadcom’s proposed director nominees to its board.
Trump cited in the order that there is “credible evidence” that causes him to believe that Broadcom—if able to purchase Qualcomm—“might take action that threatens to impair the national security of the United States,” although he didn’t elaborate on the evidence. Broadcom is in the process of reincorporating in San Jose, Calif. It is currently based in Singapore.
Last week, the U.S. Committee on Foreign Investment said it was considering investigating the proposed Broadcom deal citing national security concerns, which ended up delaying a March Qualcomm shareholder meeting. As a response, Broadcom publicly accused Qualcomm of “secretly” asking the committee to investigate the deal, which Qualcomm then denied.
The White House statement directs Broadcom and Qualcomm to “immediately and permanently abandon the proposed takeover,” and verify in writing to the foreign investment committee that they have indeed terminated the deal and any such variation.
A possible combination of Broadcom and Qualcomm would have created a massive wireless and mobile semiconductor giant with a market cap of over $200 billion. Such a huge semiconductor company was enough to worry Intel (INTC), which the Wall Street Journalreported last week was considering buying Broadcom if the deal actually went through.
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President Trump’s executive order puts an end to Broadcom’s unsolicited pursuit of Qualcomm. Qualcomm had repeatedly rejected Broadcom’s bids, citing national security concerns and a belief that the deal undervalues the company.
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.
Fortune contacted Broadcom and Qualcomm for comment and will update this story if they respond.
Qualcomm shares were down 4.5% in after-hours trading to $59.98, while Broadcom shares were relatively flat at $265.
Update: 6:33 PM PST.
Qualcomm said in a statement that it received the executive order. It also said that it moved its 2018 annual shareholder meeting to March 23, 2018 in order to comply with the order.
“Qualcomm Incorporated today received a Presidential Order to immediately and permanently abandon the proposed takeover of Qualcomm by Broadcom Limited,” the company said. “Under the terms of the Presidential Order, all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm.
