Broadcom officially drops Qualcomm bid after Trump decision - InfoNews

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Broadcom officially drops Qualcomm bid after Trump decision

FILE - In this Thursday, Nov. 2, 2017, file photo, Broadcom CEO Hock Tan speaks while U.S. President Donald Trump listens, in background, during an event at the White House in Washington, to announce the company is moving its global headquarters to the United States. Broadcom says it’s dropping its $117 billion buyout bid for rival chipmaker Qualcomm, following Trump’s decision to scuttle the proposed combination due to national security concerns. (AP Photo/Evan Vucci, File)
March 14, 2018 - 8:48 AM

NEW YORK - Broadcom is officially withdrawing its $117 billion bid to buy U.S. chipmaker Qualcomm, two days after President Donald Trump blocked the Singapore company's ambitions over national security fears.

Wednesday's move is a formality since the presidential order issued Monday had ensured the deal would be killed in any U.S. regulatory review.

Broadcom Ltd. said Wednesday that it was disappointed with Trump's decision. The company withdrew its proposed candidates for Qualcomm's board, but still plans to move its headquarters to the United States. Broadcom had its headquarters in Irvine, California, until a Singapore-based company bought it in 2015. Qualcomm had rejected Broadcom's unsolicited offer in February before the government stepped in.

Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology. The technology is expected to provide speeds needed to fuel the "internet of things" like self-driving cars and connected home appliances.

5G remains in the early stages of development. Companies including Qualcomm and China's Huawei have been investing heavily to stake their claim in the underlying technology.

Broadcom's ambitions sparked U.S. government concerns over which country will dominate the technology, as well as fears over national security.

Earlier this month, the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments in U.S. companies, cited concerns about the proposed Broadcom-Qualcomm marriage.

If the bid had gone through, Broadcom's penchant for cutting costs such as research spending could have resulted in Qualcomm losing its leadership in telecom technologies, the committee warned.

In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in U.S. telecom infrastructure, which could lead to spying or cybertheft.

Broadcom and Qualcomm are likely to pursue other deals now that Broadcom's offer has been withdrawn. Qualcomm Inc., which is based in San Diego, is attempting to take over rival chipmaker NXP Semiconductors in a $43 billion deal announced in October 2016. Morningstar analyst Brian Colello expects Broadcom to hunt for more deals once it moves to the U.S.

News from © The Associated Press, 2018
The Associated Press

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