Broadcom officialy ends Qualcomm takeover following White House intervention

Markets Insider

Broadcom has been going after Qualcomm for months now, which led into U.S. national security concerns and even President Trump standing in and blocking the takeover last week. While the president did not provide a detailed rationale, a March 5 letter from the Treasury Department calling for a review of the deal said that the administration was concerned about Broadcom's relationships with other foreign companies.

Broadcom had planned to move its headquarters from Singapore to the USA on April 3, one month before the date it had announced as part of the agreement to buy Qualcomm.

Unsurprisingly, Broadcom expresses its disappointment with its inability to proceed, but nevertheless acquiesces to the order.

In addition, the 15 potential candidates proposed by Broadcom before the Securities and Exchange Commission (SEC) are "disqualified" as possible members of the Qualcomm board, which is also prohibited from now accepting the nomination or votes of any of the candidates. The panel's finding was in keeping with the misgivings within the White House about China gaining access to important technologies like the nascent wireless standard known as 5G. After a series of rejected purchase offers - which went as high as $121 billion - Broadcom finally lost their patience with negotiations and opted to attempt a hostile takeover, securing "up to" $100 billion in debt to cover the transaction.

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Tan appeared alongside Trump in November, promising to move Broadcom's headquarters to the United States.

"The proposed absorption of Qualcomm is prohibited, and any merger, acquisition or substantially similar absorption, whether direct or indirect, is also prohibited", Trump said in a presidential order.

Broadcom's efforts to acquire Qualcomm emerged as one of last year's most controversial business moves in mobile tech. Qualcomm said that Broadcom was fundamentally underestimating the company's value.

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