Trump blocks biggest ever tech deal over 'national security' concerns

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Tan argued that combining Broadcom and Qualcomm would actually further USA interests by advancing the development of the next generation of wireless technology known as 5G, according to a person familiar with the meeting. Huawei Technologies is already the largest telecom equipment maker - ahead of Nokia and Ericsson.

Broadcom came very close to getting hold of Qualcomm, the world's largest maker of mobile-phone chips. Qualcomm also works with Huawei.

The agency suggested that the deal could curtail USA investments in chip and wireless technologies, handing leadership to a relatively opaque Chinese company that's funneling billions into developing next-generation wireless systems.

In the recent years, Qualcomm has grown to become one of the biggest competitors to China's Huawei Technologies Co.

Qualcomm gets the bulk of its revenue from chips but most of its profit from technology licensing.

President Trump has blocked the proposed $117 billion takeover of Qualcomm by Broadcom, citing concerns that the deal could pose a risk to national security.

Broadcom's hostile takeover of Qualcomm was stopped in its tracks last week after the U.S. began conducting an investigation into the risks the merger posed to national security. "Qualcomm is prohibited from accepting the nomination of or votes for any of the Candidates", Trump said.

The Chinese tech firm was barred from selling its smartphones through carriers over security problems and we believe that this presidential order was issued due to some involvement of Huawei in some manner.

"While the United States remains dominant in the standards-setting space now, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover", the letter reads. The U.S. administration did not reveal the name of these third party foreign entities.

Hock Tan, CEO of Broadcom, speaks on the floor of the New York Stock Exchange shortly before the opening bell in New York, U.S., February 12, 2018.

The Treasury argued that Broadcom has a history of acquiring companies, and then slashing their spending on new technologies.

Trump hosted Broadcom's Tan in the White House past year when the executive announced the proposed move.

United States president Donald Trump issued Qualcomm a Presidential Order, prohibiting the Broadcom takeover.

The CFIUS action was actually prompted by a request from Qualcomm, which was unusual because the committee usually doesn't review anything until an actual deal has been agreed to.

Citing national security concerns, U.S. President Donald Trump stepped into the middle of a contentious hostile takeover attempt by Broadcom of chipmaker Qualcomm March 12 and blocked it.

The president's decision is highly unusual and is only the fourth time in the past three decades that a U.S. president has intervened directly to scupper a foreign investment deal.

According to a statement released by White House, to protect national security, President Donald Trump has ordered that any kind of takeover, merger between chip-making giants Broadcom and Qualcomm is prohibited.

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).

On the other hand, Broadcom remains favorable "with or without a Qualcomm deal", the analyst said.

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