Home
Mobiles
Mobiles News
Broadcom Officially Drops Qualcomm Bid After Trump Decision

Broadcom Officially Drops Qualcomm Bid After Trump Decision

By Associated Press | Updated: 15 March 2018 10:05 IST

Highlights

Trump blocked company's ambitions over national security fears
Broadcom said that it was disappointed with Trump's decision
It still plans to move its headquarters to the United States

Broadcom is officially withdrawing its $117 billion (roughly Rs. 7.6 lakh crores) bid to buy US chipmaker Qualcomm, two days after President Donald Trump blocked the Singapore company's ambitions over national security fears.

Wednesday's move is a formality since the presidential order issued Monday had ensured the deal would be killed in any US regulatory review.

Broadcom said Wednesday that it was disappointed with Trump's decision. The company withdrew its proposed candidates for Qualcomm's board, but still plans to move its headquarters to the United States. Broadcom had its headquarters in Irvine, California, until a Singapore-based company bought it in 2015. Qualcomm had rejected Broadcom's unsolicited offer in February before the government stepped in.

Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology. The technology is expected to provide speeds needed to fuel the "Internet of Things" like self-driving cars and connected home appliances.

5G remains in the early stages of development. Companies including Qualcomm and China's Huawei have been investing heavily to stake their claim in the underlying technology.

Broadcom's ambitions sparked US government concerns over which country will dominate the technology, as well as fears over national security.

Earlier this month, the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments in US companies, cited concerns about the proposed Broadcom-Qualcomm marriage.

If the bid had gone through, Broadcom's penchant for cutting costs such as research spending could have resulted in Qualcomm losing its leadership in telecom technologies, the committee warned.

In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in US telecom infrastructure, which could lead to spying or cybertheft.

Broadcom and Qualcomm are likely to pursue other deals now that Broadcom's offer has been withdrawn. Qualcomm, which is based in San Diego, is attempting to take over rival chipmaker NXP Semiconductors in a $43 billion (roughly Rs. 2.85 lakh crores) deal announced in October 2016. Morningstar analyst Brian Colello expects Broadcom to hunt for more deals once it moves to the US.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.