President Trump bans Qualcomm takeover

President Trump says Broadcom must pull out of attempt to buy Qualcomm

President Trump says Broadcom must pull out of attempt to buy Qualcomm

The deal would have been the biggest technology sector takeover on record. On Twitter this morning, California Rep. Susan Davis (D, 53rd District) said the decision was "good for San Diego, our regional economy, and national security".

Why did President Donald Trump kill a $117 billion tech takeover? As the USA and China maneuver for control over advanced technologies, it seems that the White House has deemed Qualcomm too important to have its R&D potentially slashed by Broadcom.

As if the pound doesn't already have enough to contend with now we have the British government threating Russian Federation with goodness only knows what - singlehandedly.

Companies may challenge CFIUS's jurisdiction in court but may not challenge the inter-agency panel's national security findings, a CFIUS expert said.

Its CEO, American citizen Hock Tan, promised to move the company's legal headquarters back to the a meeting with Trump at White House in November.

"A shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States", CFIUS said."While the United States remains dominant in the standards-setting space now, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover".

Broadcom's proposed deal was under investigation by an interagency panel, chaired by the secretary of the Treasury, called the Committee on Foreign Investment in the USA and known as CFIUS.

Broadcom had been pursuing Qualcomm for about four months.

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There are also concerns, however, that the block was due to China potentially leading the development in 5G wireless technology.

Broadcom's business model relies on raising the company's profitability and value through acquisitions, which in turn limits resources for research and development, the letter added.

"Given Broadcom's business practices, the worry is that they will cut investment significantly, particularly in the 5G roadmap, weaken Qualcomm, as well as the United States position and allow Huawei, a Chinese company to take the lead", said Stacy Rasgon, chip analyst at Bernstein, speaking to CNBC. Qualcomm's commitment to R&D into the technology is virtually unparalleled in the industry, except perhaps by Huawei.

Congressman Duncan Hunter said that the merger would "damage American security" and had pointed at Broadcoms "increasing" ties with China to highlight his reservation about the deal.

"We believe Broadcom's options start with a continuation of broadly-scoped communications-focused M&A", B Riley analyst Craig Ellis said. "The Chinese market is increasingly close to throwing up barriers to USA companies and of course the American market is quite open to Chinese investment".

The agency suggested that the deal could curtail U.S. investments in chip and wireless technologies, handing leadership to a relatively opaque Chinese company that's funneling billions into developing next-generation wireless systems.

Treasury Secretary Steven Mnuchin, in his capacity as the chair of the CFIUS, said Trumps decision was consistent with the administrations commitment to take all actions necessary to protect the national security of the US. In September, Trump stopped the $1.3 billion acquisition of Portland-based Lattice Semiconductor by a private equity firm that had some Chinese investment.

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