Broadcom gives up on acquiring Qualcomm
Not every story has a happy ending so said Gabor Maté. Broadcom might have to contend with this fact as it has chosen to withdraw itself from efforts to acquire Qualcomm. This comes in the wake of the Trump administration passing an executive order to block the deal from going through citing national security concerns. Qualcomm is based in the US whereas Broadcom is based out of Singapore.
Broadcom's official statement reads,
Although we are disappointed with this outcome, Broadcom will comply with the Order. Broadcom will continue to move forward with its redomiciliation process and will hold its Special Meeting of Stockholders as planned on March 23, 2018.
Broadcom's Board of Directors and management team sincerely appreciate the significant support we received from the Qualcomm and Broadcom stockholders throughout this process.
Broadcom thanks the independent nominees who stood for election to the Qualcomm board, not only for their time and effort but also for their unwavering commitment to act in the best interests of Qualcomm stockholders."
The company also acknowledged the gravity of CFIUS's concerns regarding compromise of national security that could be latent in the deal as it would inevitably make accessible Qualcomm's know-how in the upcoming 5G revolution more easily to the Chinese given Broadcom's close collaboration with ZTE and Huawei who in turn are purported to work hand-in-glove with the Chinese Government. It said that it appreciates the fact that CFIUS's concerns are transaction-specific and not specifically intended about Broadcom or its employees.
All said and done, Broadcom is still moving ahead with its plans to redomicile to the United States. While opinions can differ on whether the deal would indeed have jeopardized national security, Intel will definitely be relieved that its coffers have been spared of a potential combined Broadcom acquisition.
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