Broadcom attempted to purchase Qualcomm back in November, in what would be the single largest takeover of a chipmaker ever. The initial offer was declined by Qualcomm’s board of directors, as was every subsequent counter offer. In response, Broadcom attempted to replace some of Qualcomm’s board, allowing the purchase to be finalized. After months of turmoil, the White House has officially blocked the acquisition with a new executive order.
According to Bloomberg, President Trump signed the executive order based on advice from the Committee on Foreign Investment. While Qualcomm is an American company, Broadcom Limited is incorporated in Singapore, causing the deal to potentially be a national security problem.
In an effort to alleviate these concerns, Broadcom has been rushing to redomicile (legally move the company) to the United States. The company began in the process in November, partially due to the newly-passed Republican tax bill, and partially to address concerns over its pending purchase of Brocade Communications Systems.
The signed executive order states, “There is credible evidence that leads me to believe that Broadcom Limited […] might take action that threatens to impair the national security of the United States; and […] Provisions of law, other than section 721 and the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), do not, in my judgment, provide adequate and appropriate authority for me to protect the national security in this matter.”
In addition, the White House has ordered the vote for Qualcomm’s new board to be delayed while the Committee on Foreign Investment investigates. While Broadcom may be blocked from purchasing Qualcomm, the door is still open for Intel to acquire the company.
Image credit: Michael Vadon