US President Donald Trump has taken the unprecedented move to block Broadcom’s plans to acquire Qualcomm, citing security concerns and bringing to an end a long battle between the two chipset manufacturers.
In the White House order Trump said there was evidence that Broadcom, which is headquartered in Singapore, “might take action that threatens to impair the national security of the United States”.
Saying there were no provisions in US law to protect security in the event of a take-over, he said that the transaction or any equivalent one would be prohibited.
The President barred Broadcom’s 15 candidates for Qualcomm’s board from standing for election at the latter’s upcoming AGM, which will also be brought forward from 5 April to 23 March under the terms of the order.
In a statement, Broadcom said it was reviewing the order, adding that it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns”.
Qualcomm issued a short statement confirming the events of the past 24 hours but did not comment further.
Both companies saw their share prices dip slightly on the news.
Trump’s involvement comes after months of wrangling between the two companies after the unsolicited offer was first made in November.
Broadcom had yesterday announced it was bringing forward its plans to relocate from Singapore to the US after the Committee on Foreign Investment in the United States (CFIUS) launched an investigation into the bid.
The CFIUS investigation had also led to Broadcom undertaking to make the US a leader in 5G through an investment programme.
Qualcomm’s current board had consistently opposed the takeover, arguing that all bids so far have undervalued it and not taken account of uncertainty for regulatory approvals.