In what has been called a “highly unusual move,” President Donald Trump blocked Singapore-based Broadcom’s takeover of U.S. chipmaker Qualcomm on Monday. Trump reportedly said that the hostile takeover of Qualcomm posed a threat to national security.
According to The Hill, the takeover would have been “the biggest tech deal in history,” but just hours after Broadcom CEO Hock Tan met with officials from the Committee on Foreign Investment in the U.S. (CFIUS) to discuss the deal, a source said the block was announced.
The Hill reports: CFIUS had launched an investigation into the national security implications of the deal last week over concerns that it would hamper U.S. efforts to develop 5G wireless networks and other emerging technologies. CFIUS on Monday recommended that the president veto the deal.
In a letter to both companies’ attorneys last week, the interagency panel said that it was concerned that Broadcom’s takeover would put at risk U.S. efforts to build next-generation wireless networks, thereby giving Chinese firms the opportunity to take the lead.
“While the United States remains dominant in the standards-setting space currently, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover,” the letter reads. “Given well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States.”
According to the report, Broadcom has been “aggressively pushing back” about concerns that it had plans to hinder Qualcomm’s research and development investments.
From the report: It announced a $1.5 billion innovation fund, promised to build out Qualcomm’s work in 5G and assured Congress that it would not sell any assets to foreign entities.
BRAKING: President Trump blocks Singapore-based Broadcom’s takeover of U.S. chipmaker Qualcomm on national security grounds.
— The Associated Press (@AP) March 12, 2018
Breaking News: President Trump blocked a takeover of the chip maker Qualcomm by Singapore-based Broadcom, citing national security. It’s a highly unusual move.https://t.co/XJxJlKMV9X
— The New York Times (@nytimes) March 12, 2018