Broadcom officially withdrew a $117 billion takeover bid for its rival chipmaker Qualcomm on Wednesday, two days after President Donald Trump issued an extraordinary order to block the acquisition effort on national security grounds.
In a statement, Broadcom said that it would comply with Trump’s order, formally abandoning what would have been the biggest takeover in the history of the technology industry. Broadcom has nevertheless said it would continue with plans to move its legal headquarters from Singapore to the United States.
“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 said.
Trump’s order came after a government panel tasked with reviewing the national security implications for business deals disclosed serious concerns about the bid. The panel’s finding was in keeping with the misgivings within the White House about China gaining access to important technologies like the nascent wireless standard known as 5G.
The move by Trump was a rare intervention by a president, but under his administration, multiple deals have been quashed after a review by the panel, the Committee on Foreign Investment in the United States, popularly known as CFIUS. Those prospective deals have included the sale of Moneygram to a unit of the Chinese e-commerce giant Alibaba, and an agreement involving Lattice Semiconductor and an investment firm with reported ties to the Chinese government.
The move by Trump came despite efforts by Broadcom and its chief executive, Hock Tan, to win over the White House, even before the hostile takeover bid was announced.
Tan appeared alongside Trump in November, promising to move Broadcom’s headquarters to the United States. At one point, the company also offered to raise its offer for Qualcomm, and when CFIUS first raised concerns about the deal, Broadcom sent a letter to lawmakers promising it would not slow research and development in 5G networking technology if the merger were approved.
Had it gone through, the deal would have had an outsize impact on consumers around the world — the two companies supply the majority of chips used in smartphones, and Qualcomm in particular has a heavy stake in 5G, which promises dramatically faster wireless download speeds.
The decision to block the Broadcom deal also came as the Trump administration has taken a much harder stance on trade, imposing stiff new tariffs on imported steel and aluminum.
Broadcom unveiled its bid for Qualcomm, based in San Diego, in November, but has consistently been rebuffed. Qualcomm said that Broadcom was fundamentally underestimating the company’s value.
In February, as the rancor between the companies grew, Qualcomm increased the amount it was offering to buy NXP Semiconductors, another large chipmaker. Broadcom, which had urged Qualcomm not to do so, then responded by reducing its offer for Qualcomm.
Broadcom had said that its bid for Qualcomm should not have been subject to CFIUS review because of its plans to relocate its headquarters to the United States. But Qualcomm, nevertheless, asked regulators to review the deal.
