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Broadcom ends bid for rival Qualcomm after Trump intervention

Chip-maker Broadcom has withdrawn its bid for rival Qualcomm, two days after US President Donald Trump declared he would block the $142bn (?104bn) deal.
Broadcom announced on Wednesday it had formally abandoned its hostile takeover bid for Qualcomm. The mammoth offer would have created a new giant in the $400bn semi-conductor industry in the tech sector's biggest ever deal.
Broadcom launched its bid in November and had been gathering support from investors to secure a deal. However on Monday Mr Trump stepped in, citing national security concerns.
"Although we are disappointed with this outcome, Broadcom will comply with the order," Broadcom said in a statement.
Mr Trump had said a takeover of San Diego-based Qualcomm by Singaporean Broadcom could pave the way for Chinese companies to gain dominance in the US telecoms sector. The Presidential order said: "Broadcom… through exercising control of Qualcomm, might take action that threatens to impair the national security of the United States".
Broadcom ends bid for rival Qualcomm after Trump intervention

San Diego-based Qualcomm had rebuffed the initial offer

Credit:
Reuters
Last week, the US government delayed a shareholder meeting at Qualcomm to allow for a review by the Committee on Foreign Investment in the United States (Cfius).
Broadcom is set to continue its plans to move its headquarters to the US under chief executive Hock Tan. The move had initially been welcomed by Mr Trump, although the bid for Qualcomm had been seen as a threat to the US telecoms industry.
"Regardless of the President's intervention, I don't believe this combination of Broadcom and Qualcomm was good for anyone - consumers, carriers or handset manufacturers," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. Analysts see Qualcomm as one of the major innovators for US 5G infrastructure, although Broadcom had sought to allay concerns it would cut back on that investment.
It is the first time a sitting president has blocked a merger before it has been signed off. While the move has rattled some dealmakers, the Trump administration has made a point of defending US microchip companies. It blocked a $1.3bn Chinese deal for Oregon’s Lattice Semiconductor, and forced Britain’s Imagination Technologies to sell off its US-headquartered division MIPS before the company was bought by a Chinese fund.
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