White House Blocks Broadcom-Qualcomm Hostile Takeover Citing National Security

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President Donald Trump issued a presidential order late last week barring Broadcom, the Singapore-based chipmaker, from acquiring via hostile takeover its San Diego-based rival Qualcomm. Mergers of this size typically go through a review process conducted by the Department of the Treasury’s Committee on Foreign Investment in the U.S. (CFIUS), but Broadcom’s management team has tried to bypass this measure by announcing it was relocating its headquarters to the United States. Treasury Secretary Steve Mnuchin, also chair of CFIUS, said in a statement, “This decision is based on the facts and national security sensitivities related to this particular transaction only and is not intended to make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled U.S. employees. The CFIUS process focuses exclusively on identifying and addressing national security concerns. This focused mandate reinforces our commitment to welcoming foreign investment, while at the same time reinforcing our commitment to protecting national security.” Broadcom has been trying to purchase Qualcomm since November 2017. The two chipset makers also battle for industry market share along with NVIDIA and Texas Instruments, among others. The Trump administration has been quite active since day one in trying to stymie the influence of foreign-owned technology companies, most notably China-based Huawei, who are trying to sell 5G and other next generation equipment to U.S. service providers and mobile device manufacturers.

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