President Trump blocks Broadcom merger with Qualcomm
WASHINGTON (Sinclair Broadcast Group) -- President Trump has issued an order blocking Singapore based Broadcom from taking over American chipmaker Qualcomm.
Trump cited national security grounds as his reasoning for this decision.
According to Reuters, Trump has also said that any merger or acquisition proposal that is "substantially equivalent" will also be blocked.
Last week, the U.S. government ordered a national security review of the merger. The government was concerned about its ability to safeguard semiconductor technology, Reuters reports.
Semiconductor technology deal with the development of chips that allow data to be transmitted at faster speeds. This helps with the processing power of computers, flat screen televisions, smartphones and any other types of technology that use chips to operate.
In a statement released by the White House, President Trump said "there is credible evidence that leads me to believe Broadcom.....through exercising control of Qualcomm Incorporated, a Delaware corporation, might take action that threatens to impair the national security of the United States."
The White House says Trump is taking the action on the recommendation of the Committee on Foreign Investment in the United States, which reviews foreign purchases of U.S. entities. Broadcom made an unsolicited bid last year to take over Qualcomm, which has been met by shareholder skepticism and regulatory scrutiny on security and antitrust grounds.
Broadcom is in the process of moving its legal headquarters from Singapore to the U.S., with the company planning on finishing the move by April 3, 2018. Trump hosted Broadcom CEO Hock E. Tan in the White House last year as he announced the move, and the company had hoped that would help it skirt the national security review.
The Associated Press contributed to this story.