Qualcomm slays a lion, baits a dragon

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

Update: Later in the day on Monday, March 12, after this story was published, President Trump signed an executive order prohibiting Broadcom from acquiring Qualcomm.

According to London, Trump's decision to black Broadcom's hostile takeover of Qualcomm is part of a broader strategy to ensure global USA preeminence in technological innovation.

Broadcom's hostile Qualcomm takeover plans hit a massive wall on Monday: Trump. There were concerns the takeover could have led to China pulling ahead in the development of 5G wireless technology.

"The revelation that Intel Corp.is considering buying Broadcom Ltd., a company valued at more than $100 billion, shows the depth to which the chip giant feels threatened by a potential tie-up between Broadcom and its rival Qualcomm Inc.", the paper reported yesterday.

"Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns", it said in a statement in response to the decision.

Just because Trump blocked Broadcom's plans doesn't automatically mean that the USA will have a lead over China when it comes to 5G.

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. Qualcomm shares fell 4.3 percent. He described the CFIUS communication to Broadcom as "unprecedented". CFIUS also said in the letter that its investigation of the bid "so far" confirmed the national-security risks it had previously identified with the proposed merger.

This is the fifth time a USA president has blocked a deal based on CFIUS objections and the second deal Mr Trump has stopped since assuming office.

"We've got to wake up and realize that China, Russia and other competitors are out there constantly trying to get technology", Portman said.

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. The company will also drop its challenge to Qualcomm's board, the people added.

Meanwhile, Broadcom announced today that is has accelerated its timetable for redomiciling its organization from Singapore to the USA, moving up the date from May 6 to April 3.

Analysts said Broadcom can still build heft through smaller deals.

Now, Mr. Trump's order leaves Broadcom little choice but to move on.

Two analysts said Xilinx and Mellanox would be a good fit for Broadcom, though not as transformational as Qualcomm. "There may be avenues for the companies to work together in other kinds of arrangements, but anything that looks like Broadcom controls Qualcomm, especially around the 5G business, CFIUS will be alert to".

But with Broadcom playing countless takeover-related tricks to move closer and closer to being able to buy Qualcomm, the White House and Trump administration has stepped in to block it all.

This item was corrected at 12:32 p.m. ET on Tues., March 13, 2018 to show that A bipartisan group of 22 House members wrote to the Committee on Foreign Investment in the U.S.in December 2016, not December of previous year.

Related:

Comments

Latest news

IL trio linked to bombing cases at mosque and women's clinic
The men, all from Clarence, Illinois , are each facing one count of arson and are in federal custody in Urbana, Illinois. The pipe bomb, constructed of polyvinyl chloride, known as "PVC", exploded, causing extensive damage.

Prosecutors Seeking Death Penalty For Florida School Shooter Nikolas Cruz
The filing follows after Mr Cruz's attorneys signalled that their client was willing to plead guilty to avoid the death penalty. Mr Cruz is due to appear in court in Fort Lauderdale this week where he will be formally asked to plead to the charges.

Details of Bachchan family's assets worth INR 10 billion
Alongside, Jaya Bachchan also owns a 1.22-hectare agricultural plot worth Rs 2.2 crore in Kakori area of Lucknow . It has been reported that the Bachchans also own 12 vehicles between them, worth over INR130 million.

Chahbahar project not aimed at strangulating anybody: Iran
The port is a crucial part of India's plans to create a transport and trade corridor to landlocked Afghanistan bypassing Pakistan. Iran and Pakistan have great relations that is going to be better in the future, said the representative of Pakistan in the UN.

Phillies officially announce Arrieta signing
Even though we are technically in a rebuild, I think all the players would agree with me that we intend to win, rebuild or not". Arrieta earned NL Pitcher of the Month and NL Pitcher of the Week honors four times over his five year tenure with the Cubs.

Other news