According to a letter from Cfius seen by the Washington Post, the United States was concerned that Broadcom would cut back on research and development at Qualcomm following the takeover. The order also notes that the abandonment has to happen immediately, leaving no room for things to be drawn out longer than it takes to go through the steps that Qualcomm and Broadcom will need to take to complete the abandonment.
Trump said the order follows recommendations issued by the U.S. Committee on Foreign Investment (CFIUS).
The move follows a letter from the Committee on Foreign Investment in the U.S. warning the companies that it believed the takeover would pose too great a security risk. These days, that means Steven Mnuchin.
The accelerated relocation raises questions about whether CFIUS has jurisdiction to investigate a Broadcom-Qualcomm deal. That panel had told the companies Sunday that it was considering recommending blocking the deal, a communication Broadcom revealed in a securities filing Monday.
In fact, this isn't the first time Trump has disallowed a chip industry deal, again on national-security grounds.
Citing national security concerns, U.S. President Donald Trump stepped into the middle of a contentious hostile takeover attempt by Broadcom of chipmaker Qualcomm March 12 and blocked it. CFIUS was charged with reviewing mergers for potential threats. The company says it supports the CFIUS review.
The Presidential order is seen as a move to shelter United States companies from foreign competition. But the deal collapsed in January after both sides said CFIUS refused to approve it.
The news extends President Trump's tough stance on foreign investment in America. Last September, he blocked the sale of Lattice Semiconductor Corp.to Canyon Bridge Capital Partners, which has ties to a fund owned by the Chinese government.
Treasury Secretary Steven Mnuchin, in his capacity as the chair of the CFIUS, said Trump's decision was consistent with the administration's commitment to take all actions necessary to protect the national security of the US.
The most recent offer, made in February, was over $121 billion. To this amount we must add more than 25,000 million in debt. Peak Asset Management Llc who had been investing in Qualcomm Inc (Call) for a number of months, seems to be less bullish one the $92.64B market cap company. But there has been speculation that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. "This feels a little more personal to me".
Its bid interest was blocked at a sensitive time - given the world is gearing up for the roll-out of ultra fast 5G mobile services and Mr Trump's wider agenda to protect the interests of United States companies. A similar House bill was also introduced by Republican Representative Robert Pittenger. A reform measure now in Congress would extend CFIUS' authority to potentially include minority investments as well - such as rounds of venture capital.
He also noted that Department of Defense programs rely on access to Qualcomm products.