Broadcom ends bid for rival Qualcomm after Trump intervention

BEIJING CHINA Chinese policemen surf the Internet at a computer fair in Beijing 21 August 2000. China has recently arrested a high school teacher in the southwestern province of Sichuan for posting articles critical of the communist authorities on the

Why did President Donald Trump kill a $117 billion tech takeover?

While blocking the deal doesn't mean that China won't become a dominant player in 5G anyway, it's one way they can slow that down.

The hostile takeover - Qualcomm had rejected Broadcom's offer - had been under investigation by the Committee on Foreign Investment in the United States, or CFIUS.

Several analysts have speculated that Singapore-based chipmaker Broadcom may now target Israeli big data connectivity company Mellanox Technologies Ltd.

But the United States is anxious that a takeover would dramatically reduce investment and research at Qualcomm, giving an advantage to China.

In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in USA telecom infrastructure, which could lead to spying or cybertheft. Companies including Qualcomm and China's Huawei have been investing heavily to stake their claim in the underlying technology.

Had it gone through, the acquisition would have been the largest technology deal in history.

Trump said that the government had come across "credible evidence" that a merger between the two companies "threatens to impair the national security of the US".

The Committee on Foreign Investment in the United States (CFIUS), which raised concerns about the Qualcomm deal with Trump, listed the highly leveraged nature of Broadcom's bid for its larger rival as a major concern coupled with the risk of the USA losing mobile technology leadership.

More news: Pre-registration Started for Westworld the Mobile Game

A shareholder meeting was scheduled for earlier this month to vote on the new board, however this was delayed until next month at the request of the Committee on Foreign Investment in the United States (CFIUS), which can prevent business deals where it's deemed could harm national security.

Congress issued a critical report on the Chinese tech firm in 2012 that effectively shut it out of the U.S. market.

After imposing tariffs on steel and aluminum imports, Trump is said to be mulling import levies on tech producs and consumer goods from China, on the grounds that the Chinese discriminates against American companies on technology transfer and violates United States intellectual property rights.

Can US stay ahead of China? The upcoming development of a 5G network has been such a high-profile nat-sec issue that the White House floated a trial balloon on nationalizing it a few weeks ago.

Broadcom has confirmed that it will withdraw its offer to acquire rival chip company Qualcomm.

Broadcom reacted by saying that it "strongly" disagreed that the deal raises any national security concerns, but by Wednesday it had conceded defeat.

"We'll have to see if management change is in the offing - it looks like investor confidence in management is low", said Stacy Rasgon, an analyst at Sanford C. Bernstein.

But that wasn't enough to convince Trump.

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