3/13/2018 2:00:18 PM
|written By : Team India Se|
United States President Donald Trump blocked Singapore-based chipmaker Broadcom’s US$117 billion (S$232.39 billion) bid for the rival chipmaker Qualcomm on March 12, citing national security concerns, reports the New York Times.
The move comes just a day after Singapore’s Emeritus Senior Minister Goh Chok Tong wrote in a Facebook post that Singapore faced “worrying times” following US trade tariffs on steel and aluminium imports.
In a presidential order, Mr Trump said “credible evidence” had led him to believe that if Singapore-based Broadcom were to acquire control of the San Diego-based Qualcomm, it “might take action that threatens to impair the national security of the US.” The acquisition, if it had gone through, would have been the largest technology deal in history.
The move comes as Broadcom prepares to complete its move from Singapore to the US next month, accelerating a timetable to relocate its official base to the country after the US government issued a rare public warning over its hostile takeover bid for Qualcomm, reports the Financial Times.
The Singaporean chipmaker said on March 12 that it should complete its move to the US by April 3. It had previously expected to do so by May 6.
President Trump’s decision to block the deal showed his determination to protect US companies from foreign competition. He cited national security also when he approved sweeping tariffs on imported steel and aluminium last week, saying those imports were a threat to US manufacturing.
Mr Trump blocked Broadcom’s bid for Qualcomm after the Committee on Foreign Investment in the United States (CFIUS) said earlier this month it would stall the bid because of national security concerns.
Broadcom denied that the bid posed a security threat.
While Broadcom is based in Singapore, China was the main concern that made Mr Trump block the deal. “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover,” a US Treasury official said last week.
Qualcomm is one of the biggest competitors to China’s Huawei Technologies Co.
A presidential action against foreign investment in a US company is rare and has only taken place four times in the past 30 years, reported the New York Times quoting the law firm Ropes & Gray.
The decision was a blow to Broadcom, which under its Pernang-born chief executive Hock Tan, has expanded through several acquisitions.
“Broadcom, which is in all important respects a US company, has been repeatedly approved by CfFIUS in its previous acquisitions of US companies and has always engaged productively with CFIUS to ensure US national security is protected,” Broadcom said in a statement.