United States President Donald Trump this afternoon issued an executive order blocking Broadcom from acquiring Qualcomm in a deal that would have been worth more than $117 billion, reports Bloomberg.
The president's order came following a recommendation from the Committee on Foreign Investment (CFIUS) in the United States, despite Broadcom's efforts to save the proposed transaction over the course of the last few weeks. U.S officials believed Broadcom's acquisition of Qualcomm, which has been under investigation by the CFIUS, could threaten national security.
The CFIUS previously said that a Broadcom acquisition of Qualcomm could undermine Qualcomm's leadership in 5G wireless technology, allowing China's Huawei to become the dominant 5G provider in the world. Broadcom, a Singapore-based company, promised not to sell Qualcomm 5G assets, announced plans to redomicile in the United States, and pledged to invest billions in the United States, but that did not ease regulators' concerns.
"There is credible evidence that leads me to believe that Broadcom Ltd." by acquiring Qualcomm "might take action that threatens to impair the national security of the United States," Trump said in the order released Monday evening in Washington.
Trump also said that "any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited."
Broadcom first made an offer to acquire Qualcomm for $70 per share in cash and stock back in November of 2017, marking the proposal of the "largest technology acquisition ever, which Qualcomm turned down.
Qualcomm also turned down subsequent offers of $121 billion and $117 billion, and had not agreed to the acquisition at the time that it was blocked by Trump. Broadcom had been attempting to add merger-friendly individuals to Qualcomm's board, but today's order makes it clear that no merger or acquisition between the two companies will be allowed.
Broadcom may intend to fight the order as earlier today, the company said in a statement that U.S. national security concerns are not a risk as "Broadcom never plans to acquire Qualcomm before it completes redomiciliation.
Update: Broadcom released a statement following Trump's order: "Broadcom is reviewing the Order. Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns."
Update 3/14: Broadcom has officially ended its bid for Qualcomm in the wake of Trump's executive order: "Although we are disappointed with this outcome, Broadcom will comply with the order."
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