18
Wednesday
July 2018
2:52 AM IST
News Headlines
Home   | Main News   | Kerala  | National   | International  | Business   | Sports   | Entertainment   | Columns   | Offbeat   | About Deepika 
International News
Trump blocks Broadcom's USD 117 billion bid to buy Qualcomm
 
(Washington, Mar 13, 2018): US President Donald Trump today blocked a planned USD 117 billion takeover of chipmaker Qualcomm by Singapore-based rival Broadcom for national security reasons, scuttling what would have been the biggest technology deal ever amid concerns that it would allow China to take the lead in the booming market of producing chips.

Trump, in his executive order, said there is "credible evidence" that leads him to believe that if Broadcom Limited took control of the US-based Qualcomm it "might take action that threatens to impair the national security of the US".

As such, Broadcom and Qualcomm "shall immediately and permanently abandon the proposed takeover", ordered the US President.

"The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited," Trump said in the executive order issued today.

The deal would have created the world's third-largest maker of microchips, behind Intel and Samsung. It would also have been the biggest takeover the technology sector had ever seen.

Broadcom has pursued a tie-up with its fellow chip maker for months. The takeover, which would have been the largest transaction the technology industry had ever seen, was tripped up by concerns that it posed a threat to American competitiveness in mobile technology by putting one of the largest mobile chip makers in the U.S. under the control of a company based in Asia.

If research and development at Qualcomm foundered under Broadcom, the administration was concerned China-based Huawei Technologies would have an opening to become an even bigger player in the booming market of producing chips that power smartphones, smart home gadgets and other mobile devices.

Broadcom said in a statement that it is reviewing the presidential order.

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

Trump's decision comes after Broadcom said last Friday that it would ask its shareholders to approve its plan to redomicile to the US.

In such a scenario, Broadcom -- which currently works under the laws of Singapore -- would have been considered as an American company and thus its proposed USD 117 billion would have been considered outside the preview of a federal agency -- the Committee on Foreign Investment in the United States (CFIUS) that reviews foreign deal.

In a letter, the CFIUS had confirmed the national security concerns. Last week, the CFIUS issued an interim order to Qualcomm directing it to postpone its annual stockholders meeting and election of directors by 30 days.

Treasury Secretary Steven Mnuchin, in his capacity as the chair of the CFIUS, said Trump's decision was consistent with the administration's commitment to take all actions necessary to protect the national security of the US.

"This decision is based on the facts and national security sensitivities related to this particular transaction only and is not intended to make any other statement about Broadcom or its employees, including its thousands of hardworking and highly skilled US employees," Mnuchin said.

"The CFIUS process focuses exclusively on identifying and addressing national security concerns. This focused mandate reinforces our commitment to welcoming foreign investment, while at the same time reinforcing our commitment to protecting national security," he added.

China is said to be the main reason behind Trump's decision, US daily 'The New York Times' said.

Last week, several US lawmakers had called for stopping Broadcom's takeover of Qualcomm.

Congressman Duncan Hunter said that the merger would "damage American security" and had pointed at Broadcom's "increasing" ties with China to highlight his reservation about the deal.

"This should concern us as a nation. These ties were most recently reflected in the agreements Broadcom signed with HBC, Inspur and StarTimes. China has a finely honed capability to access the technology of companies such as Broadcom, along with that of their subsidiaries and acquisitions," he said.

Hunter said the merger would make Broadcom the third largest chipmaker in the world, "giving them control over a major portion of the supply chain, which is critical to the vital communications components".

Senator Tom Cotton said that Qualcomm's work is too important to the US' national security to let it fall into the hands of a foreign company-and in a hostile takeover no less.

"Its hard to see a good reason why we should hand over one of our leading computer-chip makers, and thereby give Chinese companies a leg-up in the race to develop 5G and the next generation of technology. Better to keep it in American hands and protect American national security," Cotton said.(PTI)


Russia targeted by almost '25 million cyber-attacks' during World Cup: Putin
Afghan official: Taliban kill 7 police in eastern province
Trump and Putin open historic summit
Trump asked me to sue EU over Brexit, says Theresa May
Haiti prime minister resigns after deadly unrest
Former PM Nawaz Sharif, daughter Maryam arrested for corruption in Lahore
After UK-US spats, Trump flies in to turmoil in Britain
Buddha of Swat smiles nearly 11 years after Taliban dynamited it
Turkey jails mine bosses over 2014 disaster that killed 301
Merkel fires back at Trump: Germany makes 'independent decisions'
Panama, China open talks on free trade agreement
Trump names Kavanaugh as nominee for next supreme court justice
Turkey's Erdogan begins new term with expanded powers
Sharif, his daughter will be arrested on their arrival at any airport in Pak: Minister
N Korea slams 'gangster-like' US in nuclear talks
'Race against time' to rescue Japan flood victims: PM
Iran says Trump 'destabilising' oil market
Toll from deadly Thai tourist boat sinking rises to 41
Thailand diver dies from lack of oxygen during cave rescue operation
Fireworks explosions kill 24 in central Mexico
ENTERTAINMENT NEWS
I am a big flop actor: Karan Johar
 (Mumbai, May 5, 2018): Filmmaker Karan Johar is in mood to take up full-fledged acting jobs.  
Bittersweet moment for us: Akshaye on Vinod Khanna's Dadasaheb Phalke honour
Happy Sonam is getting married, Anand a great guy: Harshvardhan Kapoor
Auctioning 'Rustom' costume for good cause: Akshay Kumar
KERALA NEWS
Kerala among 13 states on thunderstorm alert
 (New Delhi, May 7, 2018): Thunderstorms accompanied by squall, hail and heavy rains are likel
Kerala Karshaka Jadha Opens to a Great Beginning / Video
Malappuram press club attack: RSS workers nabbed
Workers injured in mudslide at construction site
NATIONAL NEWS
From April next year, national database for gun licence holders
 New Delhi, Jul 16 (PTI) Come April 2019, names of all arms licence holders - new or old - will be in
SC refuses to stay new rules on health warning for tobacco products
CBI chargesheets Farooq Abdullah, three others in JKCA scam
Rajinikanth Supports 'One India, One Election' Proposal
Untitled Page
Rashtra Deepika LTD
Copyright @ 2017 , Rashtra Deepika Ltd.