By mid-afternoon, there was shocking news for Broadcom.
US President Donald Trump today blocked Singapore-based company Broadcom's United States dollars 117 billion bid for chip maker Qualcomm, citing national security concern. Earlier this month, the committee branded the proposed deal a potential security risk that could hobble the United States' ability to accelerate the speed of mobile networks to an ultra-fast standard known as "5G".
Cfius reviews deals across a variety of industries and companies from dozens of different countries.
"Given Broadcom's public disclosures about the redomiciliation process since last November, as well as its direct communications to CFIUS, Broadcom has been fully transparent with CFIUS about the redomiciliation process, and believes it is in full compliance with the March 4 interim order", the company said in a statement.
In the latter, CFIUS told lawyers for the firms that Broadcom had repeatedly violated one of its orders in its pursuit of Qualcomm and that its investigation "so far" confirmed the national security risks it had previously identified with the proposed merger, according to the Wall Street Journal. CFIUS also said that Broadcom defied an interim order requiring that it give a panel 5 business days' notice before it took steps to officially relocate to the US.
Broadcom in the past week has been aggressively pushing back on concerns that it has any plans to hamper Qualcomm's research and development investments.
QUALCOMM Incorporated (NASDAQ:QCOM) ended its day at 63.03 with the rising stream of 1.96% and its total traded volume was 7.39 million shares less than the average volume.
President Donald Trump hugs Broadcom CEO Hock Tan as Tan announces the repatriation of his company's headquarters to the United States from Singapore during a ceremony in the Oval Office of the White House on November 2, 2017 in Washington, DC.
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The Treasury Department's letter was addressed to lawyers for Broadcom and Qualcomm, and was made public by Qualcomm.
The Treasury Department said last week in a letter to lawyers involved in the deal that Qualcomm was trusted by the US government and cited Huawei as a competitive threat in the development of 5G, which is a telecommunications standard that will allow for faster transfer of data.
This afternoon Broadcom released a statement on the news: "Broadcom is reviewing the Order. This focused mandate reinforces our commitment to welcoming foreign investment, while at the same time reinforcing our commitment to protecting national security", he added.
The Story was also covered by Bloomberg as presented below. Once the move is done, Broadcom could argue that CFIUS does not have jurisdiction, the second expert said.
The Trump Adminstration's move reportedly shows the high value of the USA on maintaining the domestic edge in the technological development. Broadcom's $117 billion offer ($79 a share) is no more.
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