US Government blocks Broadcom's bid to takeover Qualcomm

President Trump invoked national security in blocking Broadcom's proposed takeover

President Trump invoked national security in blocking Broadcom's proposed takeover

Broadcom's latest move was to try and get new members elected to the Qualcomm board of directors in order to try and take over the company from within. The S&P 500 technology sector shed more than 1%, the biggest drop for the sector since March 1. They make chips used in wireless and other networks. He said: "This decision is based on the facts and national security sensitivities related to this particular transaction only". Both companies had not settled on a price yet because Qualcomm kept saying the buyout price is undervaluing them.

The takeover was under investigation by the normally secretive Committee on Foreign Investment in the United States (CFIUS).

Lee said, "We believe the U.S. is anxious that China may control the majority of 5G, and potentially future cellular tech if Broadcom gains control of QCOM". "It is positioning itself to be the number one provider of 5G equipment".

CFIUS was anxious that Broadcom's takeover would lead to a decline in investments in research and development in the sector, opening the door for Chinese firms to take the lead in developing next-generation wireless technology.

"Although we are disappointed with this outcome, Broadcom will comply with the order".

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Paul Rosenzweig, a former Department of Homeland Security official who now has a consulting firm, had also voiced caution.

"Reduction in Qualcomm's long-term technological competitiveness and influence in standard setting would significantly impact USA national security", CFIUS warned.

Broadcom continued to insist on an acquisition and had planned to replace much of Qualcomm's board in a bid to sway the decisionmaking process. It revealed that Qualcomm is a supplier to the Department of Defense (DOD) and performs on a range of contracts for the USA government customers with national security responsibilities. "If purchased by a foreign company that status might be in jeopardy", Rosenzweig added. "Meanwhile, Qualcomm's business model - which Trump's move has, in principle, perpetuated - has led to a protracted legal fight with its highest-profile customer and wireless market leader, Apple". "ORCRP0017688-topic.html" class="local_link" >Huawei, which the CFIUS has previously expressed concerns about, could step in and become dominant as 5G technology and standards and practices are developed and implemented.

"This administration has woken up to the 5G problem", Lewis said.

Broadcom announced today that it has withdrawn its bid for Qualcomm.

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