POTUS Halts Qualcomm’s Acquisition By Broadcom

The President of United States, Donald Trump on Monday blocked the microchip manufacturer, Broadcom Ltd’s takeover of Qualcomm on national security concern, putting an end what could’ve been the tech industry’s biggest deal ever. The proposed concerns being, Chins getting the upper hand in mobile communications.

broadcom_qualcomm_dealThe orders that were signed by the president showed a calculation on how United States’ lead in creating advanced and new twig and setting a new standard for the next generation of mobile communication would be sold to China if Singapore based Broadcom took over San Diego based Qualcomm (a White House official reported).

In the recent years, Qualcomm has grown to become one of the biggest competitors to China’s Huawei Technologies Co. Qualcomm has rebuffed Broadcom’s $117 billion bid, which was under investigation by the United States Committee on Foreign Investment in the US. However, in a letter that was issued on the 5th of March, the Committee said that it was looking into Broadcom possibly starving out Qualcomm of research money that would allow it to compete and the risk of Broadcom’s relationship with third-party entities.

While the letter did not specify any specific entities, the letter addressed Qualcomm as the leading company in 5G tech and development and setting new tech standards. On the other hand, China’s Huawei has been making commercial yes with big telecom operators across Europe and Asia, focusing on becoming a lead in the race for 5G networks, regardless of the concerns that were proposed by the United States. 

President Donald Trump’s move to halt the acquisition comes months after he and Broadcom’s Chief Executive Hock Tan were seen standing next to each other at the White House, announcing the company’s decision to move its headquarters to the US and calling Broadcom one the “really great, great companies”, according to a Reuters report. 

Broadcom had worked hard to complete its proposed deal to acquire Qualcomm, which has cited multiple concerns including possible antitrust issues and the offered price. It is not clear whether Broadcom would follow through with its plans of moving Broadcom’s headquarters to the United States.

Source: Reuters