Trump blocks Broadcom bid to buy Qualcomm, citing national security

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Source: Market Watch Personal Finance

President Donald Trump on Monday blocked Broadcom Ltd.’s $117 billion hostile bid for Qualcomm Inc., capping a remarkable series of moves by the Trump administration reflecting officials’ concerns about an intensifying arms race between the U.S. and China over advanced technologies.

While Broadcom

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  is a Singapore-based company, the U.S. panel that vets foreign deals said that the bid could have had implications for the U.S.’s broader technological competition with China. That panel, the Committee on Foreign Investment in the U.S., known as CFIUS, said it was worried that Broadcom would stymie research and development at Qualcomm

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  given its reputation as a cost-cutting behemoth. CFIUS said such a move could weaken Qualcomm — and thereby the U.S. — against foreign rivals racing to develop next-generation wireless technology known as 5G, such as China’s Huawei Technologies Co.

Read: How Broadcom vs. Qualcomm went from hostile takeover bid to a Trump blockade

Broadcom, which launched its hostile bid for Qualcomm in November in what could have become the technology industry’s biggest-ever deal, was working to redomicile in the U.S. to evade the panel’s review. but the presidential order effectively ended its acquisition hopes.

Broadcom, which has said it would invest in Qualcomm’s 5G technology if a deal went through, said late Monday it was reviewing the order. “Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns,” it said in a statement.

An expanded version of this report appears on WSJ.com.

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Source: Market Watch Personal Finance