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Trump blocks Qualcomm’s acquisition

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    President Donald Trump has blocked the $117bn takeover of chip maker of Qualcomm by Singapore-based Broadcom.

    Qualcomm makes key components found in many mobile phones and devices, and the US-based chip company has faced successive legal challenges alleging it has engaged in unfair business practices.

    Qualcomm had rejected Broadcom’s bid, and in announcing his decision, Trump said “there is credible evidence” to believe Broadcom and its partners “might take action that threatens to impair the national security of the United States” if the takeover goes through.

    The computer chip makers must “immediately and permanently abandon the proposed takeover”, Trump said in a presidential order on Monday.

    “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,” Trump said.

    Broadcom said in a statement it is reviewing the order but emphasised it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns”.

    National security

    Trump’s decision was foreshadowed by a March 5 letter from Treasury Department regulators to the companies that raised what it called “national security risks” of the takeover, particularly the looming transition to 5G cellular networks.

    “Qualcomm has become well-known to, and trusted by, the US government,” said Deputy Assistant Secretary for Investment Security Aimen Mir.

    “Limitation or cessation of supply of Qualcomm goods or services to the US government could have a detrimental impact on US national security.”

    In an ultimately futile attempt to assuage concerns, Broadcom said last week it was committed to making the US “the global leader in 5G”. The company further pledged to create a $1.5bn fund to bolster training and education for US engineers.

    While initially founded in the US, Broadcom reincorporated in Singapore in 2016 after it was sold to Avago. It maintains its administrative headquarters in California.

    View the original article:

    SOURCE: Anadolu news agency

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