Broadcom abandons plans to acquire Qualcomm following Trump veto

Broadcom abandons plans to acquire Qualcomm following Trump veto

The decision of the head of the White house explained the presence of "credible evidence" indicating that the transaction "threatens the national security of the United States".

Broadcom has dropped its bid for Qualcomm, after Donald Trump blocked the deal citing national security concerns.

"Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns", the company said.

Broadcom said in a statement released today: "Although we are disappointed with this outcome, Broadcom will comply with the Order".

"In both the definitive merger agreement that Broadcom provided to Qualcomm and in the revised version that Qualcomm sent back to Broadcom on February 26, 2018, one of the closing conditions was that Broadcom redomicile to the US, and notably, in neither party's draft was the closing of the proposed acquisition conditioned on CFIUS clearance", the company said in a statement. "Qualcomm/Broadcom is like the Fort Sumter of this technology battle", said GBH Insights analyst Dan Ives, referring to the battle that kicked off the Civil War.

Broadcom shares closed the trading day up 3.5 percent to $262.84 and gained slightly more in after-market trades. Treasury Department further sent a letter to both, Broadcom and Qualcomm which was made public on the 12th of March.

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Lee said, "We believe the USA is anxious that China may control the majority of 5G, and potentially future cellular tech if Broadcom gains control of QCOM".

The tiny computer chips embedded in smartphones, smart home gadgets, and a wide range of other connected devices are expected to become one of the most critical technologies in the coming years. The move announced Tuesday, Feb. 20, 208, comes as Qualcomm itself is in the crosshairs of Broadcom Ltd., which earlier this month raised its own cash and stock bid for Qualcomm to $121 billion.

"Under the terms of the presidential order, all of Broadcom's director nominees are also disqualified from standing for election as directors of Qualcomm", the California-based company said in a statement.

It would appear that Broadcom's ambitions of buying Qualcomm are well and truly dead.

"Given well-known USA national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative security consequences for the United States".

In the Broadcom-Qualcomm deal, the focus is on so-called "5G" wireless technology, which promises data speeds that rival those of landline broadband now.

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