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Published: March 13, 2018 | Source: CNBC | Author: Mark Campbell

A US Executive Order has blocked Broadcom’s hostile takeover of Qualcomm

Broadcom's hostile takeover of Qualcomm has been blocked by a US Executive Order

A US Executive Order has blocked Broadcom’s hostile takeover of Qualcomm

Last week, Broadcom’s planned hostile takeover of Qualcomm came across of a major stumbling block, an investigation by the US Committee on Foreign Investment (CFIUS). This force Qualcomm to delay their next shareholder’s meeting, where Broadcom planned to force their merger by influencing six of Qualcomm’s eleven-member board of directors.   

At the conclusion of this investigation, President Donald Trump was informed of potential risks to national security and issued an executive order which blocked the acquisition. This executive order is available to read on the official White House website (link here), though it doesn’t go into detail regarding these alleged risks to US national security, aside from a statement that the reasoning was “credible”. 

Both Qualcomm and Broadcom have been ordered to immediately abandon the proposed deal, which is something which will please Qualcomm’s current management, who have long been against the deal. Broadcom has been attempting to acquire Qualcomm for quite some time, offering $130 billion at the end of 2017 and then $145 billion a few weeks ago, two bids that Qualcomm has already denied outright. 

 

      I hereby order that: The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.

All 15 individuals listed as potential candidates on the Form of Blue Proxy Card filed by Broadcom and Broadcom Corporation with the Securities and Exchange Commission on February 20, 2018 (together, the Candidates), are hereby disqualified from standing for election as directors of Qualcomm.

Qualcomm is prohibited from accepting the nomination of or votes for any of the Candidates. The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover.

 

Broadcom's hostile takeover of Qualcomm has been blocked by a US Executive Order

 
The wording of the executive order leaves Broadcom with little choice but to abandon their plans to acquire Qualcomm, Diehr Qualcomm or Broadcom have released a statement regarding the US’ Executive Order. 

You can join the discussion on Broadcom’s hostile takeover of Qualcomm being blocked by a US executive order on the OC3D Forums. 

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