The White House, referring to national security grounds, prevented Broadcom’s Singapore chip maker from acquiring the Qualcomm telecoms company in California.
President Donald Trump has prevented the acquisition by quoting on Monday, citing “credible evidence” that a $ 140 billion business would “damage the United States’ national security.”
The deal would have been created with one of the biggest acquisitions in the technology industry to give China the opportunity to gain decisive influence in American mobile communications.
According to analysts, the presidential decree reflects the American standpoint that the United States would lose its leading role for China in the creation and standardization of the new generation of mobile phones for business. Broadcom’s headquarters in Singapore, for example, is Washington, China, or at least the possibility for Chinese companies to enter the Singapore-owned large corporation. California’s Qualcomm has become one of China’s largest competitors in Huawei’s world market and has once again rejected Broadcom’s takeover bid.
The Foreign Investment Investigation Unit (CFIUS), operating within the US Treasury, in early March, drew attention to the fact that after a possible takeover, the Singapore company could make the California company “source shortage” and thus open the possibility of “third-party partners” to establish business relationships. Professionals did not name specific foreign companies, but generally stated that if China were to take the lead in the 5G mobile phone market, it would have “basically negative consequences for US security.”
San Diego, based in the forefront of semiconductor manufacturing, manufactures semiconductors, processors and telecommunication tools. In November, Broadcom was dismissed by Qualcomm’s board of directors by saying that the $ 103 billion bid was too low. Broadcom has already offered $ 121.39 billion in February, which was $ 82 a share for the previous $ 70.
If the acquisition was to have been the largest transaction ever in the high technology sector.
Broadcom said in a brief statement that it did not agree with the finding that Qualcomm’s proposed acquisition of US national security interests was compromised. The company “is studying the presidential decree”.
Broadcom announced on Monday that it will return its Singapore headquarters to the United States with effect from April 3 to cushion American authorities’ concerns.
Qualcomm has announced that it will advance its shareholders’ meeting from April 5 to March 23.
Following the announcement of Trump’s decision, Qualcomm’s exchange rate dropped by more than 4 percent in post-closure electronic trading in New York, while Broadcom strengthened by 0.63 percent.
Source: MTI / Image: bumm.sk /