Trump Blocks Chinese Purchase of Chipmaker Due to National Security
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President Trump has issued an executive order blocking Singapore-based Broadcom’s $117 billion takeover of U.S. chipmaker Qualcomm on national security grounds.
The heated battle for ownership of Qualcomm has ended with a presidential decree barring Broadcom from ever owning the company after CFIUS cited national security concerns with the prospect of such a deal. $QCOM. $AVGO
— David Faber (@davidfaber) March 12, 2018
Additionally, Reuters reports that the Trump order says all 15 candidate directors proposed by Broadcom are disqualified for Qualcomm board.
Trump’s decision confirms what Hayman Capital’s Kyle Bass explained last week.
Bass explained on CNBC why he didn’t think the U.S. can allow Broadcom’s potential purchase of Qualcomm to go through because of QCOM’s importance to developing 5G technology:
“We can’t possibly let the Broadcom Qualcomm merger go through. We can’t possibly allow that technology and that technological know how” to fall into hands of others.”
The U.S. government is also worried about the issue.
The Treasury Department wrote a letter Monday to lawyers involved in the deal expressing concern about Chinese competitors in 5G network development, which raises national security concerns over the Broadcom-Qualcomm merger.
Broadcom said in a letter to Congress regarding its offer to acquire Qualcomm that the company will not sell any “critical national security assets” to any foreign companies.
But that was not enough to satisfy the Committee on Foreign Investment in the U.S. (CFIUS).Read More...