US President Donald Trump on Monday blocked semiconductor maker Broadcom Ltd's proposed takeover of Qualcomm on grounds of national security, ending what would have been the technology industry's biggest deal ever.
Broadcom said it was reviewing the presidential order."Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns", it said in a statement in response to the decision.
In a statement earlier on Monday, CFIUS took Broadcom to task for trying to speed up its planned move to the US without proper notice and warned that it was considering referring the deal to the White House (only the president can actually block a takeover on national security grounds).
Broadcom also criticized Qualcomm for asking for the CFIUS investigation.
Qualcomm is one of the San Diego area's largest private employers, and the family of co-founder Irwin Jacobs is one of the area's most generous philanthropists.More news: Hillary Clinton: United States "doesn't deserve Trump"
Since January, CFIUS has blocked Ant Financial's US$1.2 billion acquisition of United States money transfer company MoneyGram International, and has urged AT&T Inc, the second-largest wireless carrier, to cut commercial ties with Chinese phone maker Huawei Technologies Co because of national security concerns.
The US government action to block Broadcom's bid removes just one existential threat from Qualcomm's future.
In the letter, a Treasury official said CFIUS accelerated its investigation into the bid in light of Broadcom's violations of the panel's earlier order.
As Broadcom sought to elect its own slate of directors to Qualcomm's board, the run-up to an aborted shareholder meeting made clear how dissatisfied investors have become with Mollenkopf.
Broadcom's hopes of acquiring Qualcomm might have been quashed for good.
He also noted that Department of Defense programs rely on access to Qualcomm products.More news: Boots Riley's "Sorry to Bother You" Looks Insanely Funny from First Trailer
The Treasury Department, which leads CFIUS, had said the Qualcomm deal raised red flags because it threatened Qualcomm's leadership in developing the next generation of wireless technology.
Qualcomm also has raised the specter of a long, hard regulatory review by global competition agencies, which could weaken the company just as 5G networks are rolling out. The president blocked Canyon Bridge Capital Partners LLC's attempt to buy Lattice Semiconductor Corp., ignoring the firm's pledge to save jobs.
Broadcom's hostile takeover of Qualcomm - the latter company rejected the bid - would have combined two computer chip makers.
Under the order, both Broadcom and Qualcomm must report to CFIUS every week indicating their compliance with the order, that including descriptions of their work in completely and permanent terminating the takeover plans. After a record 2016, such investment dropped by more than a third in 2017 to US$29 billion, according to Rhodium Group.
Broadcom contends it is already a US company "in all important respects" and has won CFIUS approval for previous acquisitions.
Shares of Broadcom rose less than 1.0 percent to $264.10 in after hours trade while Qualcomm fell 4.3 percent to $60.14.More news: John Cena Challenges The Undertaker to a Match at WrestleMania
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