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(WASHINGTON) — President Donald Trump is blocking Singapore-based Broadcom’s takeover of U.S. chipmaker Qualcomm on national security grounds.
The White House says Trump is taking the action on the recommendation of the Committee on Foreign Investment in the United States, which reviews foreign purchases of U.S. entities. Broadcom made an unsolicited bid last year to take over Qualcomm, which has been met by shareholder skepticism and regulatory scrutiny on security and antitrust grounds.
Broadcom is in the process of moving its legal headquarters from Singapore to the U.S., with the company planning on finishing the move by April 3, 2018. Trump hosted Broadcom CEO Hock E. Tan in the White House last year as he announced the move, and the company had hoped that would help it skirt the national security review.
The Committee on Foreign Investment in the United States (CFIUS), which raised concerns about the Qualcomm deal, listed the highly leveraged nature of Broadcom’s bid for its larger rival as a major concern and a risk to Qualcomm’s leadership on mobile technology.