In yet another win for US President Donald Trump when it comes to securing American jobs, a "disappointed" Singapore-based Broadcom on Wednesday announced to withdraw and terminate its offer to acquire San Diego-based chip-maker Qualcomm. In a presidential order, the president Mr. Trump told that reliable evidence led him to accept that if the Singapore-based Broadcom were given control of the Qualcomm, it might take action, which threatens in impairing the United States' national security.
Qualcomm rejected the hostile takeover bid from Broadcom multiple times, while the Committee on Foreign Investment in the US (CFIUS) operating under the Treasury Department, investigated the national security threat and determined there were multiple red flags, and now the deal is dead.
On top of that, China, the USA and Europe are racing to develop the next generation of wireless data network, called 5G, for mobile phones and increasingly connected devices.
In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in US telecom infrastructure, which could lead to spying or cybertheft. Qualcomm quickly spurned its unsolicited suitor and continued to resist even after Broadcom raised its original offer from $103 billion. Unlike Qualcomm, Tan said, Broadcom financed its innovation through "lawful practices".
Broadcom has been trying to acquire chipmaker Qualcom for several months now.
Trump had instructed Broadcom to back off after a US panel charged with reviewing foreign acquisitions of domestic companies suggested that the deal could impede American technological competitiveness.
In its announcement today about the earlier redomiciliation date, Broadcom said it had always planned to complete the move ahead of a planned merger with Qualcomm.
The US president argued that the operation, which could have been the largest in the technology sector, "threatened to harm US national security".
Broadcom unveiled its bid for Qualcomm, based in San Diego, in November, but has consistently been rebuffed.
Broadcom has been going through a process of moving its legal headquarters to the U.S.in an effort to distance itself from its Asian roots.
Broadcom's ambitions sparked US government concerns over which country will dominate the technology, as well as fears over national security.
"Such a company, if subjected to national or terrorist interests adverse to America, could install lockout features to block our security agencies from monitoring mobile data".