The White House recently decided to block Broadcom’s $ 117 billion bid to take over Qualcomm due to national security concerns.
According to CNN, US President Donald Trump on December 12 wrote that there is “credible evidence” that Singapore-based semiconductor chip maker Broadcom and its affiliates “may take threats. threatens to harm the national security of the US ”. Mr Trump said Broadcom must “immediately and permanently give up on the takeover plan” of US chip maker Qualcomm.
Before the US President’s deterrent move, Broadcom expressed a “strong disagreement” and stated that the acquisition of Qualcomm did not create “any national security concerns”.
The largest and most complex acquisition in technology history between the two leading computer chip manufacturers in the world was thoroughly investigated by the US Government Foreign Investment Commission (CFIUS) before bringing make the final decision. Previously, Qualcomm rejected a $ 117 billion offer from Broadcom.
Last week, the US government raised a series of concerns about the merger in a letter to the two companies. CFIUS said it is looking at “the associated risks from Broadcom’s relationships with other foreign companies” as well as “the national security effects that may arise from intentions. Broadcom’s business with Qualcomm ”.
It is known in the letter that one of the biggest concerns on the part of Washington is that the deal will leave the US behind and allow China to take the lead in 5G technology development. Qualcomm is famous for inventing 2G and 3G wireless networking technologies and the company is currently investing heavily in 5G research.
Broadcom shortly after announced that, if the acquisition of Qualcomm was successful, the company pledged to push the United States to become a “global leader in 5G technology”, and would create a new fund worth 1. , 5 billion USD to train American engineers. However, in a letter written by the US Treasury official on behalf of CFIUS on November 11, it reaffirmed the national security concerns in this deal and announced that CFIUS would bring the matter to the President. .
Qualcomm said on Tuesday that the company had received Mr. Trump’s decision and that under the terms of action, “all Broadcom candidates will be excluded from the selection of Qualcomm directors”.
Mr. Trump’s ability to block trade deals is based on an old 1962 law. By citing national security reasons, Mr. Trump will have the power to prevent foreign companies from entering into his business. American companies. And this is not the first time Mr. Trump has used this “power”.
In recent years, US presidents have paid special attention to semiconductor companies. In September 2017, Mr. Trump stopped Canyon Bridge Capital Partners, a private equity firm with ties to the Chinese government, from acquiring US chip maker Lattice Semiconductors. In 2016, former President Barack Obama also banned a Chinese business from taking over Aixtron, a German semiconductor company operating in the US.
* Source: Youth