"In both the definitive merger agreement that Broadcom provided to Qualcomm and in the revised version that Qualcomm sent back to Broadcom on February 26, 2018, one of the closing conditions was that Broadcom redomicile to the USA, and notably, in neither party's draft was the closing of the proposed acquisition conditioned on CFIUS clearance", the company said in a statement.
Being based in the United States as opposed to Singapore should make it easier for Broadcom to make acquisitions of USA companies without falling under the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).
On top of that, China, the U.S. and Europe are racing to develop the next generation of wireless data network, called 5G, for mobile phones and increasingly connected devices.
The Trump administration nevertheless balked at the prospect of a prominent US chipmaker being owned by a foreign company, particularly at a time countries around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.
Citing unnamed "people familiar with the matter", The Wall Street Journal yesterday reported that should Broadcom appear likely to take over Qualcomm, Intel "could step in with its own offer for Broadcom". Unlike Qualcomm, Tan said, Broadcom financed its innovation through "lawful practices".
Broadcom issued a statement after hearing the White House's decision stating that it "is reviewing the order" and underlining its "total disagreement" with the claim that the proposed transaction represents a problem for USA national security. Rejected by the American chipmaker's board, Broadcom looked to conduct a hostile takeover.
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Qualcomm had come up with many pretty wild arguments against the deal, but it never landed on the one proffered by CFIUS-a lack of R&D for 5G could give Huawei an edge to dominate the 5G world, threatening USA national security. Led by Tan, a US-educated Malaysian entrepreneur, Broadcom grew largely through acquisitions.
Broadcom, which says it will go ahead with its pledge to relocate to the United States from Singapore, said it was disappointed that President Trump had issued what was effectively a blocking order but reluctantly accepted it.
Broadcom Ltd. said Wednesday that it was disappointed with Trump's decision.
In a presidential order, Trump blocked Broadcom's almost $121 billion bid for Qualcomm, saying it might "impair the national security" of the country.
In a statement, Broadcom said it "strongly disagrees" that the acquisition raises any national-security concerns. Not long after, the Trump administration scuttled Alibaba-affiliated Ant Financial's bid to acquire Dallas-based fintech company MoneyGram International.