In an unusual move, President Trump, citing national security concerns, has issued an executive order blocking Broadcom Ltd. from acquiring San Diego based Qualcomm Inc.
The move by the president effectively kills the $117 billion deal that had been subject to U.S. government scrutiny on national security grounds.
The president acted on a recommendation by the Committee on Foreign Investment in the U.S., which reviews acquisitions of American firms by foreign investors.
In the order President Trump stated, "There is credible evidence that leads me to believe that Broadcom Ltd. by acquiring Qualcomm might take action that threatens to impair the national security of the United States."
The White House statement continued, "The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover. Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the UnitedStates (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover of Qualcomm have been completed."
The move to protect Qualcomm brought praise from both Democrat and Republican Congressman.
Dem. Rep. Scott Peters representing the 52nd District issued the following statement:
“I’m glad the president blocked Broadcom’s bid and I’m grateful to the administration for acting quickly before Qualcomm’s annual meeting. I’m particularly glad Broadcom’s proposed candidates are prohibited from running for election to Qualcomm’s board of directors. Infiltration of the Board posed a similar threat, and could have opened the U.S. to more security vulnerabilities though potential ties to the Chinese government or military. This sends a message to Broadcom and other foreign companies that this innovation is vital to national security. It also reinforces to Qualcomm that it is on the right path and it should continue innovating."
Rep. Rep. Duncan Hunter Jr. representing the 50th District issued the following statement:
“(President Trump) did the right thing and he did it in good timing, which is important in these deals,” Hunter told the Union-Tribune in a phone interview, citing the fact that Qualcomm has contracts with the government for military technology. Qualcomm is as integral to our U.S. military and the NSA (National Security Agency) as it is to our Apple phones just doing civilian calls. That’s how important this is to the country and San Diego. You’ve got 17,000 jobs and all the jobs that rely on all those high paid, high end engineering jobs at Qualcomm … The national security aspect of this cannot be overstated.”