Washington : US President Donald Trump on Tuesday blocked Singapore-based company Broadcom’s $117 billion bid for chip maker Qualcomm, citing national security concern.
Trump, in his executive order, said there is “credible evidence” that leads him to believe that if Broadcom took control of the US-based Qualcomm it “might take action that threatens to impair the national security of the US”.
As such, Broadcom and Qualcomm “shall immediately and permanently abandon the proposed takeover”, ordered the US President.
“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 said in the executive order issued on Tuesday.
Trump’s decision in this regard comes after Broadcom said last Friday that it will ask its shareholders to approve its plan to redomicile to the US. In such a scenario, Broadcom — which currently works under the laws of Singapore — would have been considered as an American company and thus its proposed $117 billion would have been considered outside the preview of a federal agency — Committee on Foreign Investment in the US (CFIUS) – that reviews foreign deal.