Trump blocks $117 billion Broadcom-Qualcomm merger

The move comes after a government panel called for an investigation over national security concerns.

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Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Watch this: Trump blocks Broadcom-Qualcomm merger

President Donald Trump on Monday blocked Broadcom's proposed $117 billion acquisition of rival chipmaker Qualcomm, saying the deal threatened to "impair the national security" of the US.

"The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited," Trump wrote in an order, which directs both companies to immediately abandon the proposed deal.

Trump's order follows the lead of the Committee on Foreign Investment in the United States, a government panel that reviews mergers that could result in a foreign company controlling an American business. The panel, also known as Cfius, earlier this month called for an investigation of the takeover out of concern for Broadcom's relationships with foreign entities.


Broadcom's takeover of rival chipmaker Qualcomm has been rejected by President Donald Trump.

Claudia Cruz/CNET

Broadcom said in a statement it's reviewing Trump's order and that it "strongly disagrees" that the proposed acquisition raises any national security concerns.

The proposed merger of the two companies was billed as the largest-ever tech acquisition, creating a chip giant that could supply components to a wide array of electronic gadgets found in your home or pocket. A deal would've also marked a surprising turnaround from nearly a decade ago, when the companies were bitter courtroom rivals.

Singapore-based Broadcom, a maker of chips for everything from cable modems to set-top boxes to digital video recorders, launched its unsolicited bid of $130 billion for Qualcomm in November.

San Diego-based Qualcomm, the world's largest maker of chips and processors for phones, rejected a revised, $121 billion buyout in February. Talks grew more contentious a few weeks later when Broadcom lowered its buyout offer for Qualcomm to approximately $117 billion, making "an inadequate offer even worse."

Cfius' call for an investigation was prompted by concern the deal could weaken "Qualcomm's technological leadership," according to a letter from a United States Treasury official.

"China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover," the official said in the letter. A Cfius review is often enough to quash a deal.

Qualcomm said it would reconvene its annual shareholders meeting on March 23 and noted that all of Broadcom's director nominees had been disqualified by Trump's order.

Shares of Qualcomm fell close to 5 percent in after-hours trading following the announcement. Broadcom shares were up slightly.

Updated at 6 p.m. PT with statements from Broadcom and Qualcomm.

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