The US president Donald Trump has blocked Singapore-based telecom giant Broadcom from acquiring Qualcomm Inc, the White-house said in a statement.
“The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited,” President Donald Trump said in an order on Monday.
Broadcom has been running all around the place trying to acquire Qualcomm Inc. So much so, the firm has also starting the process of changing it’s domicile from Singapore to the United States.
That move hasn’t budget the US security of state, who are adamant that the acquisition of Qualcomm by the Broadcom will be major setback for the US based chipmaker, leaving the US behind in the race to adoption of 5G networks.
Chinese telecom firms like Hauwei have been seen as a threat to the US security, with the government going so far as to warn the people from buying their devices. This move by president Trump is a severe setback to Broadcom’s efforts to takeover Qualcomm.
There is one last route Broadcom could take. After it’s relocation to US as a home company in April, it could fight the president’s order in court after it’s domicile is changed to the US.
Broadcom had almost doubled it’s bid in the past to a staggering 100+ billion US$. It’d be interesting to see if it gives up it’s pursuit, or decides to challenge the president order in court.