U.S. Blocks Broadcom Takeover of Qualcomm

Posted on March 13, 2018 by Paul Thurrott in Android, Hardware, Mobile with 15 Comments

U.S. Blocks Broadcom Takeover of Qualcomm

Over the weekend, I noted that there is always a bigger fish, referring to the possibility that Intel would prevent Broadcom’s $117 billion hostile takeover of Qualcomm. Well, now it doesn’t need to bother, thanks to an even bigger fish: Citing national security concerns, the president of the United States has signed an executive order blocking the acquisition.

“There is credible evidence … that Broadcom … through exercising control of Qualcomm … might take action that threatens to impair the national security of the United States,” the order explains. “Provisions of law … provide adequate and appropriate authority … to protect the national security in this matter.”

“On the basis of the findings,” the order continues, “the proposed takeover of Qualcomm by [Broadcom] is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.”

Whatever that “credible evidence” of possible national security violations is, it remains a secret. And it’s unclear if the president even knows that Singapore, where Broadcom is based, is not actually part of China, which appears to be the real target of this order. I’m no fan of xenophobia or isolationist policies, which is what this really is.

But no matter: Broadcom’s hostile takeover bid for Qualcomm threatened to disrupt an industry-wide transition to the next era of mobile computing, in which speedy 5G networking will essentially erase the access speed differences between local and remote data. The company had been riding high and innovating quickly, and its acquisition by Broadcom, which has been pushed to the sidelines, threatened to ground everything to a halt.

Broadcom says that it is reviewing its legal options.

“Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns,” a Broadcom statement notes.


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