President Donald Trump issued an executive order on Monday blocking Broadcom Ltd. from acquiring Qualcomm Inc., scuttling a $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, which reviews acquisitions of American firms by foreign investors. The decision to block the deal was unveiled just hours after Broadcom Chief Executive Officer Hock Tan met with security officials at the Pentagon in a last-ditch effort to salvage the transaction.
“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,” Trump said in the order released Monday evening in Washington.
Trump’s order came after an investigation by CFIUS, which had said that Broadcom’s acquisition would undermine Qualcomm’s leadership in 5G wireless technology, opening the door for China’s Huawei Technologies Co. to become dominant.
Qualcomm is an American multinational semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services.
Broadcom Corporation was an American fabless semiconductor company that made products for the wireless and broadband communication industry. It was acquired by Avago Technologies in 2016 and currently operates as a wholly owned subsidiary of the merged entity called Broadcom Limited. The division is headquartered in Irvine, California.
In 2016, Broadcom proposed merging with Brocade Communications Systems. The merger was delayed for review by the Committee on Foreign Investment in the United States. In 2017, Broadcom announced it would relocate its legal address from Singapore to Delaware, which would avoid the review.
In November 2017, Broadcom proposed to purchase Qualcomm for $130 billion USD, which was rebuffed by Qualcomm’s board.
Number of employees: 15,700
Headquarters: San Jose, California, USA
Revenue: US$13.24 billion
Products: Digital and Analog Semiconductors
Tan Hock Eng, who is from Singapore, is behind Broadcom. He is the president and CEO.
Also known simply as Hock Tan, he is Broadcom President, Chief Executive Officer and Director. He has held this position since March 2006.