Broadcom Drops Bid for Qualcomm After Trump’s Intervention

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March 14, 2018 11:49 am Published by

The move by Mr. Trump came despite efforts by Broadcom and its chief executive, Hock Tan, to win over the White House, even before the hostile takeover bid was announced.

Mr. Tan appeared alongside Mr. Trump in November, promising to move Broadcom’s headquarters to the United States. At one point, the company also offered to raise its offer for Qualcomm, and when Cfius first raised concerns about the deal, Broadcom sent a letter to lawmakers promising it would not slow research and development in 5G networking technology if the merger were approved.

Had it gone through, the deal would have had an outsize impact on consumers around the world — the two companies supply the majority of chips used in smartphones, and Qualcomm in particular has a heavy stake in 5G, which promises dramatically faster wireless download speeds.

The decision to block the Broadcom deal also came as the Trump administration has taken a much harder stance on trade, imposing stiff new tariffs on imported steel and aluminum.

Broadcom unveiled its bid for Qualcomm, based in San Diego, in November, but has consistently been rebuffed. Qualcomm said that Broadcom was fundamentally underestimating the company’s value.

In February, as the rancor between the companies grew, Qualcomm increased the amount it was offering to buy NXP Semiconductors, another large chip maker. Broadcom, which had urged Qualcomm not to do so, then responded by reducing its offer for Qualcomm.

Broadcom had said that its bid for Qualcomm should not have been subject to Cfius review because of its plans to relocate its headquarters to the United States. But Qualcomm, nevertheless, asked regulators to review the deal.

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