USA regulators have in recent weeks expressed concerns that the takeover could cause the United States to fall behind China in the race to develop 5G networks. Companies including Qualcomm and China's Huawei have been investing heavily to stake their claim in the underlying technology.
Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.
Trump took the unusual step to block the planned acquisition of Qualcomm after a government investigation determined the company sale to a foreign group would impair national security. At the same time, there has been a wave of consolidation in the industry, so "the direction for the technology and standards has been [putting them in] fewer hands at this point and the stakes are bigger". The company was hoping that their current process of moving its headquarters back to the USA would be enough to alleviate the concerns put forth by the federal government.
An investigation of the deal by the Committee on Foreign Investment in the USA, which reviews purchases of American businesses by foreign investors, confirmed national security threats related to the acquisition by Broadcom, the Treasury Department said in a letter to both companies made public March 12. "This is in large part because of a weakening of Qualcomm's position would leave an opening for China to expand its influence on the 5G standard-setting process".
Teacher accidentally fires gun in class, students injured
Gonzales said Tuesday's incident changed his views about President Donald Trump's recent proposal to arm teachers . One student suffered minor injuries as a result, KION-TV in Monterey reported .
An interesting postscript to the deal: Broadcom will reportedly continue its plan to relocate its headquarters to the USA, even though it will be subject to hundreds of millions of dollars in additional taxes. He said: "This decision is based on the facts and national security sensitivities related to this particular transaction only". But it might slow it down, Fleming said: "They honestly believe they are helping to protect national security by doing this".
President Barack Obama in 2012 blocked a Delaware-based but Chinese-owned company named Ralls Corp. from owning four wind farms in OR near a Navy base in 2012.
Sources had told Reuters on Tuesday that Broadcom was ready to scrap its bid for Qualcomm. Less than a week after the meeting had been postponed, Broadcom said Monday it would be a full USA company April 3, days before the rescheduled Qualcomm board meeting. Broadcom aimed to win control of the board so it could advance with its hostile takeover.
Hock Tan, CEO of Broadcom, speaks on the floor of the New York Stock Exchange shortly before the opening bell in New York February 12, 2018.
"5G is a core piece of the franchise Broadcom is trying to purchase", Bernstein analyst Stacy Rasgon wrote in a note to clients before the deal was blocked.