Broadcom drops Qualcomm acquisition bid after Trump block

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Relying on a recommendation from the Committee on Foreign Investment in the United States (CFIUS) and citing national security concerns, President Trump's action marks only the fifth time in the last 30 years that a US president has blocked foreign investment in the United States for national security reasons. Specifically, the order says Broadcom cannot suggest Qualcomm board members in order to stack takeover odds in their favor, nor can they "purchase or merge" with Qualcomm in any way.

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Wednesday's move is a formality since the presidential order issued Monday had ensured the deal would be killed in any U.S. regulatory review. "The importance of @Qualcomm's research into 5G technology and how it relates to our future can not be understated".

On Monday, President Donald Trump signed an order that halted what would have been the largest technology acquisition in history.

In an attempt to ease those worries, Broadcom last week pledged to make the USA a leader in the race to build 5G networks, saying it would create a $1.5 billion fund to support the effort if took control of Qualcomm.

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The Presidential order is seen as a move to shelter USA companies from foreign competition. Qualcomm quickly spurned its unsolicited suitor and continued to resist even after Broadcom raised its original offer from $103 billion. "Broadcom's Board of Directors and management team sincerely appreciate the significant support we received from the Qualcomm and Broadcom stockholders throughout this process".

The decision to block the Broadcom deal also came as the Trump administration has taken a much harder stance on trade, imposing stiff new tariffs on imported steel and aluminum.

In such a scenario, Broadcom - which now works under the laws of Singapore - would have been considered as an American company and thus its proposed Dollars 117 billion would have been considered outside the preview of a federal agency - Committee on Foreign Investment in the United States (CFIUS) – that reviews foreign deal.

The growing influence of Huawei is a major factor killing the Qualcomm-Broadcom deal.

As of now, it is not clear if such a move from the Singapore-based company will win Trump's approval. The U.S. authorities also recently blocked a proposal by Alibaba's Ant Financial to acquire the money transfer firm Moneygram.

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