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Broadcom Kills Qualcomm Deal After Trump Blockade

Broadcom has killed its planned acquisition of Qualcomm after the Trump administration stated it would block the deal. The administration issued an order on Monday stating it was blocking the planned acquisition based on "national security" concerns. Much like the government's recent targeting of Huawei, the effort is largely seen of one of protectionism, as the United States attempts to protect U.S. companies like Intel and Cisco from added overseas competition. The effort reflects concerns about China besting the US in the race to fifth generation (5G) wireless.

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Not surprisingly, Broadcom has now scrapped the deal, issuing a statement saying it was disappointed by the order but saying it would comply.

"Although we are disappointed with this outcome, Broadcom will comply with the Order," said the company. "Broadcom will continue to move forward with its redomiciliation process and will hold its Special Meeting of Stockholders as planned on March 23, 2018."

Singapore-based Broadcom has been trying to purchase Qualcomm for most of the year, but has found its advances continually rejected. The company more recently has tried to stuff Qualcomm’s board with members friendly to a possible acquisition. Broadcom was currently in the process of moving its headquarters from Singapore to the US as an unsuccessful effort to appease the US government.

"There is credible evidence that leads me to believe that Broadcom … might take action that threatens to impair the national security of the United States," Trump wrote in the executive order.

But again, the block has more to do with protecting Intel, Cisco, and other United States companies in the race toward next-generation 5G networks, a form of protectionism that many say could result in counter-productive trade wars with unintended consequences. Others believe the deal is good because an overlarge Broadcom could have harmed sector innovation.

"The combined entity would have had dangerously dominant positions in some core markets such as location technologies, Wi-Fi, Bluetooth, RF hardware and automotive semiconductors," said ABI Research analyst Stuart Carlaw.

For those interested, the White House order is here and Broadcom's statement can be found here.

Most recommended from 50 comments



pclover
join:2008-08-02
Santa Cruz, CA

12 recommendations

pclover

Member

A good thing

However you want to dice it and the reasons behind this it's a good thing overall. If Broadcom was allowed to acquire Broadcom it would create a giant monopoly. Qualcomm right now is trying to finalize a deal to acquire NXP.

Don't forgot Avago acquired Broadcom, Merged the companies and re-branded both to Broadcom.

Mediatek sells cheap garbage and Intel stuff does not perform nearly as well as Qualcomm stuff. See the iPhone speed throttle fiasco.

Overall Broadcom having Qualcomm and NXP under their belt would be absolute disaster to competition in the mobile sector.

GlennLouEarl
3 brothers, 1 gone
Premium Member
join:2002-11-17
Richmond, VA

6 recommendations

GlennLouEarl

Premium Member

"Credible evidence" for Trump

Bad dream? Ate something that didn't agree with him? Saw a shadow in the corner of his eye? Or, more likely, the deal might devalue some stock he owns.

Dsm1995
join:2010-04-14
San Diego, CA

3 recommendations

Dsm1995

Member

thank gof...

good for trump.. keep QUALCOMM san diego and not like that bitch spanos