On Monday, President Donald Trump issued an order blocking Broadcom from pursuing a takeover of Qualcomm, citing "credible evidence" that any such merger would represent a threat to the United States' national security.
Wednesday's move is a formality, since the presidential order issued Monday had ensured the deal would be killed in any USA regulatory review. The goal for Broadcom was nothing less than to remake the networking and mobile chip markets, as 5G adoption looms. "Although we are disappointed with this outcome, Broadcom will comply with the Order", The company said in a statement.More news: Josh McCown signed his new contract from a Chick-fil-A drive-through
The company's hostile takeover attempt came at a vulnerable time for Qualcomm, which has been embroiled in a long-running legal dispute with Apple and is facing several large fines from governing bodies across the globe, including a $1.23 billion fine recently levied against the company for breaking the European Union's antitrust laws.
Earlier this month, the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign investments in us companies, cited concerns about the proposed Broadcom-Qualcomm marriage. In short, Broadcom had made it clear that it planned to focus on Qualcomm's past patents instead of producing new technology with the company's resources.More news: Lavrov warns of 'grave consequences' of USA new strike against Syria
"CFIUS has identified potential national security concerns that warrant a full investigation of the proposed transaction", the letter states.
In addition, lawmakers have expressed concerns in the past about foreign companies gaining a foothold in USA telecom infrastructure, which could lead to spying or cybertheft.More news: Should You Hold Altria Group, Inc. (NYSE:MO)
Buying Qualcomm would have make Broadcom the third-largest chip maker, behind Intel Corp. and Samsung Electronics Co. Today Broadcom acknowledges that development with word that it's withdrawn its Qualcomm offer. Morningstar analyst Brian Colello expects Broadcom to hunt for more deals once it moves to the U.S.