Donald Trump turns down Broadcom's bid to acquire Qualcomm

US President Donald Trump has blocked Singapore-based Broadcom's bid to acquire smartphone chipmaker Qualcomm. Trump cited national security concerns for behind move.

Trump's order banned Broadcom's proposed mega-acquisition, stating that such a deal "threatens to impair the national security of the United States". Trump administration stated that there is 'credible evidence' to suggest that the deal may turn detrimental to America's national security.

Trump ordered Broadcom and Qualcomm to "immediately and permanently abandon the proposed takeover."

Broadcom had previously assured that it would complete its move to the United States by early April, ahead of a planned Qualcomm shareholder vote on the $117 billion deal -- meaning any national security concerns were moot.

"Broadcom's proposal to acquire Qualcomm has always been premised on the completion of Broadcom's previously announced plan to redomicile," the company noted in a statement.

"In short, US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation."

According to a letter issued by the Treasury Department over the weekend, Broadcom had violated a Committee on Foreign Investment in the United States (CFIUS) order on three separate occasions. The company failed to give advance notice before taking actions such as filing takeover-related securities filings in the United States.

An investigation carried out by the CFIUS on Foreign Investment in the United States (CFIUS) "confirmed" national security concerns earlier identified by US officials. CFIUS noted that a Broadcom-Qualcomm merger could weaken Qualcomm`s leadership in the field. 

Ever since the proposed deal emerged in November last year, Qualcomm rejected multiple Broadcom bids. The microprocessor-making giant postponed the deal until April 5 and later sought a national security review of Broadcom's deal.

(With inputs from AFP)