Trump Blocks Qualcomm Takeover Bid on National Security Grounds

President Donald Trump has prohibited a proposed $117 billion takeover of San Diego-based chipmaker Qualcomm Inc. by Singapore rival Broadcom Ltd., citing U.S. security concerns.

Broadcom had hoped to avoid the security issue by relocating its headquarters to the U.S. ahead of the acquisition. The company expects to complete the move by April 3, two days before Qualcomm shareholders had been scheduled to vote on six board members nominated by Broadcom.

Six board seats would give the company majority control over Qualcomm and help cinch the would-be merger, which has been described as the tech sector’s largest ever. Broadcom claims national security concerns are irrelevant, since the company won’t acquire Qualcomm until after it completes its redomiciliation to the U.S.

Bloomberg News notes that Broadcom CEO Hock Tan announced his company’s headquarters move last November during a meeting with Trump at the White House. Analysts say Trump’s presidential order to block the takeover reflects his determination to shield U.S. companies from overseas competitors, especially China.

Merging Qualcomm and Broadcom would create the world’s third-largest make of computer chips, after Intel and Samsung. Qualcomm is considered a global leader in the development of chips for ultra-fast 5G wireless networks.​​​, including those contemplated by carmakers.