On the advice of the US foreign investment watchdog, the President has closed the door on Broadcom's takeover of Qualcomm.
US President Donald Trump has vetoed Broadcom’s hostile takeover of Qualcomm, citing a risk to national security.
The Singapore-based chipmaker was attempting to acquire US-based Qualcomm, with the staggering one time figure of $US130 billion (including $25 billion to cover net debt) being offered late last year.
The most recent bid had been reduced to $117 billion, but it still would’ve been the largest acquisition in tech history, dwarfing Dell’s $US67 billion buyout of EMC back in 2015.
However on Monday, after an investigation by the US Committee on Foreign Investment in the United States (CFIUS) — which reviews the national security implications of acquisitions — the White House issued a presidential order blocking the tie-up.
“The proposed takeover of Qualcomm by the Purchaser (Broadcom) is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited,” the order reads.
The investigation found there was “credible evidence” to suggest that Broadcom “might take action that threatens to impair the national security of the United States”, if it were to take control of Qualcomm.
It is just the fifth time a US President has used the executive order based on CFIUS concerns, and the second time Trump has issued such a veto.
Last year, he blocked the Chinese state-owned Canyon Bridge Fund from acquiring Oregon-based Lattice Semiconductor Corporation.
Broadcom is not giving up
Broadcom anticipated Trump’s intervention, and was in the process of shifting its headquarters from Singapore to the US.
According to Bloomberg, the relocation was expected to be wrapped up by April 3. This date was moved forward from May 6, as the company aimed to circumvent the CFIUS review.
In a statement, the semi-conductor giant suggested it is likely to fight the order.
“US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation,” it said.