Broadcom has dropped its takeover bid for rival chipmaker Qualcomm after US President Donald Trump blocked the deal for national security reasons.
Trump issued an order to block the merger on Monday. The order stated that there is “credible evidence” if the Singapore-based Broadcom took control of the US-based Qualcomm, the company “might take action that threatens to impair the national security of the United States.”
Broadcom said in a statement it was disappointed with the outcome but would comply. That marks a turnaround from two days ago when Broadcom said that it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns.”
Trump’s order gave it little room to move though, unless the company was willing to contest the ban in court. Bloomberg notes that the deal had been investigated by the Committee on Foreign Investment in the US and determined to be a national security threat if the acquisition went ahead, according to a letter from the Treasury Department to the two companies.
Broadcom initially made an unsolicited $130 billion bid for Qualcomm in November 2017 and has been trying to take over Qualcomm for several months, but its offers have been repeatedly rejected. If it had been successful, the combined company would have been the third-largest chipmaker in the world.