Qualcomm shares dip 4.7% after Trump halts Broadcom takeover offer

Qualcomm shares dip 4.7% after Trump halts Broadcom takeover offer

In a presidential order, Trump said there was "credible evidence" to believe that the takeover might "impair the national security of the United States".

The president's order is the latest sign of Trump's tough stance on foreign takeovers of United States technology, and dovetails with a broader move to contain China on trade and deal-making. Last month, Broadcom raised its offer to $121 billion in its curiosity to acquire the company, Qualcomm refused again by saying that this buyout will reduce the technological competitiveness and will influence both companies badly. CFIUS also said that Broadcom disobeyed an interim order that required the company to give 5 business days' notice to the panel before it took steps to officially move its legal headquarters from Singapore to the U.S. The company had plans on finishing the relocation by April 3, 2018.

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

Huawei has a dominant position in China, which is set to become the world's biggest 5G market by far, and has also made inroads in the rest of world to compete with rivals such as Ericsson and Nokia in several lucrative markets, including countries that are longstanding USA allies.

Qualcomm said in a statement that it received the executive order. "Provisions of law ... provide adequate and appropriate authority ... to protect the national security in this matter".

Keep in mind that the decision from Donald Trump can not be appealed since it is a presidential order, and Broadcom's executives have not stated their intentions on what they will end up doing next.

"And a chip industry merger featuring a company now headquartered in Singapore raises concerns about "Chinese influence", a report in LightReading noted today".

If that, and a reduced flow of investment dollars, was a effect of the tie up it could be seen as a threat to America's position at, or close to, the top of the global tech charts in the midst of a cut throat race to develop, and sell, 5G wireless technology.

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Broadcom said it would fully cooperate with CFIUS screening, but the letter implied it would be hard to persuade the committee to approve the takeover.

A Qualcomm statement said the company today received a Presidential Order to immediately and permanently abandon the proposed takeover of Qualcomm by Broadcom Limited.

Another fear of the USA government is that Broadcom would not push ahead with Qualcomm's 5G R&D plans, leaving China's Huawei technologies to dominate communications tech and equipment used in the world's next-gen tech devices.

Broadcom's company's physical headquarters is already in San Jose, California - about 450 miles from Qualcomm's headquarters in San Diego.

The White House was forced a few days ago to postpone the general meeting of shareholders of the U.S. semiconductor company to torpedo the maneuver. The president issued an order to block the $117 billion Qualcomm buyout, effectively killing what could have been among the biggest tech deals in history.

A few hours ago US President Donald Trump stepped in to kill off any deal between Broadcom and Qualcomm. The White House on Monday blocked a takeover bid of Qualcomm by Broadcom for national security reasons.

This move comes contrary to Trump's comments about Broadcom last November when he called the group "one of the great, great companies", which he was "thrilled" to welcome to the US. Broadcom will be shifting its headquarters to the USA, and from there it will be deciding its next move.

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