Broadcom has almost reached a dead-end with its pursuits to acquire Qualcomm as Trump’s government has prohibited the take over with regards to national security. White House has ordered Broadcom immediately and permanently abandon the proposed takeover of Qualcomm.
Further to the order, the Presidential order has also said that all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm. As for Qualcomm, White House ordered to reconvene its 2018 Annual Meeting of Stockholders with a 10-day notice period, that is March 23, 2018. Stockholders of record on January 8, 2018 will be entitled to vote at the meeting.
The move comes after Committee on Foreign Investment in the US alerting both the companies that it believed the takeover would pose a security risk. CFIUS says that it believes that if Broadcom acquires Qualcomm, it would likely cut costs of the American company and weakens its ability to compete against Chinese companies like Huawei and others. It would also let the Chinese have an advantage with the 5G wireless and leave Americans vulnerable. Broadcom is also ordered to give the CFIUS panel a 5-day notice before it relocates to the USA.
Not so surprisingly, Broadcom said that it is reviewing the order and “strongly disagrees that the acquisition would pose a national security.” On other hand, Qualcomm is happy considering that it consistently kept rejecting the acquisition.