Biggest Tech Deal Ever Failed: Trump Blocks Broadcom's $117 Billion Merger Bid

Biggest Tech Deal Ever Failed: Trump Blocks Broadcom's $117 Billion Merger Bid

The president said in his order that "there is credible evidence" leading him to believe that Broadcom through control of San Diego-based Qualcomm "might take action that threatens to impair the national security of the United States".

A move by Chinese companies to fill the void left by the proposed Qualcomm acquisition and dominate the making of 5G chips permitting faster data transmission would have significant security implications for the United States, the panel found.

The successful acquisition of closely held United States firms by private Chinese companies in quiet, largely undisclosed transactions indicates that extreme pessimism is unwarranted, according to the deal makers. It would also have been the biggest takeover the technology sector had ever seen.

According to the US-based media reports, the merger would have put one of the largest mobile chipmakers in the USA in the hands of an asia-based company, a region that has been racing against American companies over years to develop the next generation of mobile technology.

Broadcom said in a statement that it is reviewing the presidential order.

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So far, CFIUS said its probe confirms the national security risks of the Broadcom-Qualcomm deal.

Meanwhile, Broadcom announced today that is has accelerated its timetable for redomiciling its organization from Singapore to the US, moving up the date from May 6 to April 3.

Trump's order came shortly after the Committee on Foreign Investment in the United States (CFIUS) said in a letter to both companies that the deal posed national security concerns.

In a letter, the CFIUS had confirmed the national security concerns.

Trump's order requires Qualcomm to convene a postponed 2018 stockholders meeting within 10 days.

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In September 2017, he blocked Chinese firm Canyon Bridge Fund from acquiring Lattice Semiconductor Corporation (which is based on Oregon), citing national security concerns.

The multi-agency regulator said Broadcom's moves to relocate to the USA earlier than expected serve to shorten CFIUS's time to investigate.

Broadcom, which had pledged to move all its headquarter functions to the U.S. if it won the day, said it "strongly disagreed" with the reasoning behind the decision.

"I get the concerns about China taking our intellectual property etc. but I think they are misplaced in this specific case", Rasgon said. Qualcomm quickly spurned its unsolicited suitor and continued to resist even after Broadcom raised its original offer from $103 billion. "China has a finely honed capability to access the technology of companies such as Broadcom, along with that of their subsidiaries and acquisitions", he said.

Qualcomm is being hurt by weakening demand for smartphones and the company's profit-generating licensing unit has been hit with regulatory fines around the world and a challenge from Apple, one of its largest customers, which has stopped paying up as the two prepare to battle in the courts.

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The move comes on the heels of Trump's announcement that he will implement tariffs on foreign steel and aluminum companies in a bid to resurrect manufacturing of those commodities in the United States.

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