U.S. presidential order blocks Broadcom’s acquisition of Qualcomm
Broadcom has been making moves to acquire Qualcomm for quite some time, with the latter company rejecting an offer of $130 billion last year because Qualcomm said it “significantly” undervalues the company.
Since that initial rejection, rumors and expectations pegged another offer to come from Broadcom. But it looks like that won’t be happening after all. The United States President sent out an order yesterday to block any potential acquisition of Qualcomm by Broadcom. The statement reads, “The proposed takeover of Qualcomm by the Purchaser (Broadcom) is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether affected directly or indirectly, is also prohibited”.
Going further, the reasoning behind the blocked acquisition appears to be national security-related, as the statement goes on to say that there is “credible evidence” that the acquisition, if allowed, Broadcom “might take action that threatens to impair the national security of the United States”.
Broadcom, for its part, is working to get the decision changed. It is currently working to relocate its headquarters from Singapore to the United States, and its planned acquisition of Qualcomm is based on that planned move. Broadcom also informed Bloomberg that it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns.”