Broadcom gives up on Qualcomm buyout after Trump veto
The will-they/won’t-they flirtation between two of the world’s largest mobile chip companies has come to an abrupt end. Broadcom has announced that it will no longer attempt to buy its US-based rival, Qualcomm. In a statement, Broadcom said that it was “disappointed with this outcome,” and would drop its attempts to appoint nominees to Qualcomm’s board.
Bringing Broadcom and Qualcomm together would have been the technology industry’s largest ever deal. The pair could never agree on the price, but negotiations had reached as high as $160 billion — a figure close to the $165 billion it cost to unite Time Warner and Aol..
Qualcomm had initially rebuffed Broadcom’s overtures, initially saying that the offer materially undervalued the company. That was back when the figure was $130 billion, although Qualcomm reps then said that they would meet with their opposite numbers to discuss the offer (by suggesting it was higher).
The saga took a surprising turn on Monday 12th, when the White House issued an order blocking the purchase. The move followed a letter from the Committee on Foreign Investment, which said that letting a foreign company control Qualcomm would pose a security risk.
Broadcom had intended to move its official HQ to the US, thereby reducing the amount of oversight necessary to make the deal work. But the presidential order blocked any further attempt, even if it was handled indirectly, and disqualified any of Broadcom’s potential director appointees to Qualcomm’s board.
Now that Broadcom has withdrawn its offer, and its nominated directors, it remains to be seen what’s going to happen next. Broadcom has said that it will “continue to move forward with its redomiciliation process,” and will still hold its special stockholders meeting on the 23rd.
We have reached out to Qualcomm for comment and will update this story further if any word is received.