Broadcom Ltd Chief Executive Hock Tan is unlikely to slow his acquisition spree after US President Donald Trump blocked the microchip maker's US$117 billion (RM456.7 billion) bid for Qualcomm Inc on national security grounds, analysts said yesterday.
The Dow Jones industrial average dropped almost 200 points, or 0.68%, Tuesday as Wall Street processed President Donald Trump's blocking of Broadcom's proposed takeover of a United States competitor and a surprise change of the US' top diplomat. Treasury Department further sent a letter to both, Broadcom and Qualcomm which was made public on the 12th of March.
U.S. regulators have in recent weeks expressed concerns that the takeover could cause the United States to fall behind China in the race to develop 5G networks.
With the Broadcom takeover behind it, Qualcomm "can get back on target", said Larry Townes, project director of the Georgetown Center for Business and Public Policy.
Broadcom's attempted takeover came as companies around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.More news: Google will be banning cryptocurrency ads from June onwards
London addressed the Trump administration's blocking of Singapore-based semiconductor manufacturer Broadcom's hostile takeover attempt of USA -based competitor Qualcomm.
Citing unnamed "people familiar with the matter", The Wall Street Journal yesterday reported that should Broadcom appear likely to take over Qualcomm, Intel "could step in with its own offer for Broadcom". The Broadcom-Qualcomm deal is dead today, but who what could happen tomorrow and is way more worrisome.
CFIUS noted that a Broadcom-Qualcomm merger could weaken Qualcomm's leadership in the field.
According to Bloomberg, Broadcom's effort to win six seats on Qualcomm's 11-member board of directors had significant support from Qualcomm shareholders in early balloting.
And not everyone thinks the United States national security concerns over the deal are justified. The deal was striking for a number of reasons, including the fact that the entities had yet to agree to a deal in the first place, and that Broadcom was in the process of relocating its headquarters to the United States. "Broadcom will continue to move forward with its redomiciliation process and will hold its Special Meeting of Stockholders as planned on March 23", the company said in a statement.