Trump blocks Broadcom takeover of Qualcomm on 'national security' grounds

US President Donald Trump on Monday blocked microchip maker Broadcom Ltd's proposed takeover of Qualcomm Inc on national security grounds, ending what would have been the technology industry's biggest deal ever amid concerns that it would give China the upper hand in mobile communications.

The presidential order reflected a calculation that the United States' lead in creating technology and setting standards for the next generation of mobile cell phone communications would be lost to China if Singapore-based Broadcom took over San Diego-based Qualcomm, according to a White House official.

San Diego-based Qualcomm has emerged as one of the biggest competitors to China's Huawei Technologies Co in the sector, making Qualcomm a prized asset.

Qualcomm had earlier rebuffed Broadcom's $117 billion bid, which was under investigation by the US Committee on Foreign Investment in the United States (CFIUS), a multi-agency panel led by the US Treasury Department that reviews the national security implications of acquisitions of US corporations by foreign companies.

Qualcomm rejects Broadcom's $103-bn takeover bid, says offer undervalued

Mobile chipmaker Qualcomm Inc on Monday rejected rival Broadcom Ltd's $103-billion takeover bid, saying the offer "dramatically" undervalued the US company.

Shares of Qualcomm were up 1 per cent at $65.25 in premarket trading, while those of Broadcom fell 0.7 per cent to $263.

"After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty," Qualcomm's Presiding Director Tom Horton said in a statement.

Broadcom made an unsolicited bid last week in its efforts to become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year.

Reuters reported on Sunday that Qualcomm would rebuff the $70 per share offer, citing people familiar with the matter.

Broadcom could not immediately be reached for comment.

The offer also comes at a time when Qualcomm is trying to close its pending $38-billion acquisition of automotive chipmaker NXP Semiconductors NV.

Broadcom has indicated it is willing to buy Qualcomm irrespective of whether it closes the NXP deal.
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