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Trump blocks Broadcom-Qualcomm deal, citing national security concerns
Source: CNBC   Editor: Helan   Update Time :2018/3/13 17:26:11

President Donald Trump killed Broadcom's proposed buyout of Qualcomm, citing national security concerns, according to a statement issued by the White House on Monday.

"There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom)...through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States," the statement said.

Both companies were ordered to immediately abandon the proposed deal. The order, an unusual move by any sitting U.S. president, also prohibits all 15 of Broadcom's proposed candidates for Qualcomm's board from standing for election.

The U.S. Treasury's Committee on Foreign Investment in the United States had already expressed concerns about the transaction in a March 5 letter addressed to Broadcom and Qualcomm lawyers. CFIUS listed several issues, including Broadcom's reputation for cutting research spending and potential national security risks.

Despite CFIUS's concerns, Broadcom had been optimistic that a plan to move its headquarters from Singapore to the U.S. could save the deal.

Shares of Qualcomm fell close to 5 percent after the announcement. Broadcom stock gained about 1 percent in extended trading, after briefly falling.

Qualcomm did not immediately respond to CNBC's request for comment. In a statement that it issued late Monday, Broadcom said it is reviewing the order.

"Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns," the statement said.

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