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White House blocks Broadcom, Qualcomm takeover attempt
It looks like Broadcom‘s lengthy bid to acquire US chipmaker Qualcomm is finally over, after the White House announced that it has blocked the takeover attempt.
The White House noted that a Broadcom-owned Qualcomm “might take action that threatens to impair the national security of the United States”. Furthermore, US President Donald Trump noted that the law doesn’t provide “adequate and appropriate authority” for him to protect national security in this issue. As a result, any possible deal has simply been blocked.
“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,” the White House concluded.
The US also said that all 15 Broadcom-backed candidates for Qualcomm’s board are disqualified.
Broadcom will walk away empty-handed after the White House blocked its bid for Qualcomm
“The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover. Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover of Qualcomm have been completed.”
Broadcom first made a takeover bid for Qualcomm late last year, eventually upping the bid in February. However, the US chipmaker asserted that the deal “dramatically undervalued” the mobile chipset leader, also pointing to Qualcomm’s leadership in next-generation 5G standards.
“It [the deal – ed] gives no value to the transformative opportunity in 5G and Qualcomm’s ability, through its leadership position and targeted investments, to deliver significant stockholder value as we capture this opportunity,” read an open letter from Qualcomm at the time.