Broadcom officially abandons Qualcomm takeover bid

Broadcom officially abandons Qualcomm takeover bid

President Trump has nixed Singapore-based Broadcom's purchase of the American chipmaker Qualcomm on national security and protectionist grounds, although Broadcom had promised to relocate to the United States.

Wednesday's move is a formality, since the presidential order issued Monday had ensured the deal would be killed in any US regulatory review. Even as Qualcomm rejected Broadcom's offers, the company didn't back down, and earlier this month we learned of plans to stack Qualcomm's board with some voices more amenable to the acquisition.

Though Broadcom has been blocked from buying Qualcomm, the company still plans on moving its headquarters from Singapore to the U.S.

Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.

Unsurprisingly, Broadcom expresses its disappointment with its inability to proceed, but nevertheless acquiesces to the order.

Broadcom issued a statement after hearing the White House's decision stating that it "is reviewing the order" and underlining its "total disagreement" with the claim that the proposed transaction represents a problem for USA national security.

"CFIUS has identified potential national security concerns that warrant a full investigation of the proposed transaction", the letter states.

For its part, Qualcomm, wanted no part of Broadcom's offer and acted quickly to publicly rejectthe bid. It also noted that Broadcom has reduced spending on research and development at the businesses it acquires, a practice that could make Qualcomm less innovative. Qualcomm Inc., which is based in San Diego, is attempting to take over rival chipmaker NXP Semiconductors in a $43 billion deal announced in October 2016. Analyst Ben Thompson explains why he thinks this was the right move.

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