President Donald Trump on Monday blocked Broadcom Ltd.’s $117 billion hostile bid for Qualcomm Inc. over national security concerns, quashing what could have been the biggest-ever tech deal.
“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,” says the presidential order, signed by Trump.
A U.S. national-security panel had signaled it might imminently recommend Trump take just the action he did. The Committee on Foreign Investment in the U.S., known as CFIUS, told lawyers for the companies in a letter dated Sunday that Singapore-based Broadcom AVGO, +3.57% had repeatedly violated one of its orders in its pursuit of Qualcomm QCOM, -0.35% and that its investigation “so far” confirmed the national-security risks it had previously identified with the proposed merger.
CFIUS already said it was worried that Broadcom, which has a reputation as a cost-cutting behemoth, would stymie research and development at Qualcomm, the San Diego-based chip maker, and weaken it against foreign rivals racing to develop next-generation wireless technology, such as China’s Huawei Technologies Co.
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