Qualcomm has been ordered to abandon all talks with Broadcom over a prospective $140 billion takeover deal by the President of the United States Donald Trump.
The US chipmaker has been ordered to pull out of the proposed deal with the Singaporean firm as it ‘threatens to impair the national security of the US’. The Presidential Order also instructed Qualcomm to disqualify any director nominees lined up by Broadcom.
A spokesperson for Qualcomm said: “Qualcomm Incorporated today received a Presidential Order to immediately and permanently abandon the proposed takeover of Qualcomm by Broadcom Limited. Under the terms of the Presidential Order, all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm.
“Qualcomm was also ordered to reconvene its 2018 Annual Meeting of Stockholders on the earliest possible date, which based on the required 10-day notice period, is March 23, 2018. Stockholders of record on January 8, 2018 will be entitled to vote at the meeting.”
Likewise, Broadcom has been ordered to ‘immediately and permanently abandon the proposed takeover’. The order states: “Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover of Qualcomm have been completed.”
Last week, Broadcom’s hostile takeover bid was put under investigation by the Committee on Foreign Investment in the US (CFIUS). It came just days before Qualcomm’s investors were going to vote on a slate of directors Broadcom had nominated. As a result, Qualcomm suspended its board vote until April 5, after the government asked for 30 days to review the potential deal. However, the investigation has been wrapped up in just one week.
The full presidential order can be read here: https://www.whitehouse.gov/presidential-actions/presidential-order-regarding-proposed-takeover-qualcomm-incorporated-broadcom-limited/