Mergers: Trump blocks Broadcom’s takeover
Citing national security concerns, President Trump this week blocked Singapore-based Broadcom’s $117 billion bid for California chipmaker Qualcomm, said Cecilia Kang and Alan Rappeport in The New York Times, signaling he is “willing to take extraordinary measures to promote his administration’s increasingly protectionist stance.” Trump issued a presidential order citing “credible evidence” that Broadcom “might take action that threatens to impair the national security of the United States” if it acquired control of Qualcomm, which makes wireless chips and also licenses key wireless patents. The “blockbuster” hostile takeover would have been the biggest tech deal of all time.
Trump’s extraordinary intervention was “months in the making,” said Ted Greenwald in The Wall Street Journal. Qualcomm’s leaders, hoping to thwart the takeover, opted for an “unusual strategy,” petitioning the Committee on Foreign Investment in the U.S., a “secretive” federal panel that vets foreign purchases of U.S. companies on national security grounds, to review the deal in January. The Trump administration’s subsequent decision “was all the more unusual” because it centered not on Broadcom’s Singapore origins, but on the idea that a sale would weaken Qualcomm’s “innovative prowess, and by extension U.S. clout against China.”