You are here: Home » News-IANS » Business-Economy
Business Standard

Broadcom's proposed Qualcomm bid blocked on security grounds

IANS  |  Washington 

In an unusual move, US blocked Singapore-based Broadcom's $140 billion bid for rival US chipmaker on grounds of national security.

In a presidential order on Monday, Trump claimed that "credible evidence" had led him to believe that if were to acquire control of Qualcomm, it "might take action that threatens to impair the national security of the "

"The proposed takeover of by the Purchaser (Broadcom) is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited," the Presidential order read.

Had it gone through, the acquisition would have been the largest deal in history, said in a report.

In a statement, said it was reviewing the order, and contested the notion that the bid posed a security threat.

"strongly disagrees that its proposed acquisition of raises any national security concerns," a said in a statement.

The Presidential order is seen as a move to shelter US companies from foreign competition.

However, some analysts believe the decision was more about competitiveness and winning the race for 5G technology, than security concerns.

"Given the current political climate in the US and other regions around the world, everyone is taking a more conservative view on mergers and acquisitions and protecting their own domains.

"We are all at the start of a race, and you have 5G as a crown jewel that everyone wants to participate in -- and every region is racing towards that," quoted IDC's Mario Morales, Vice of enabling technologies and semiconductors, as saying.

Broadcom had been pursuing Qualcomm for about four months.

Qualcomm's board of directors unanimously rejected an acquisition proposal from Broadcom last month, saying that they are turning down the latter's $121 billion bid on the grounds that the offer undervalued the business, and also that any takeover would face antitrust hurdles.

--IANS

qd/

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 07:42 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU