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Trump kills off biggest tech deal with national security order on Qualcomm

Hannah Boland
Qualcomm had rejected two Broadcom bids - REUTERS

Donald Trump has blocked Broadcom's $142bn (£102m) takeover of US rival Qualcomm, killing the biggest technology deal ever after months of wrangling between the two chipmakers. 

In an order issued on Monday evening, the US president said there was "credible evidence" that led him to believe that, in buying Qualcomm, Singapore-based Broadcom "might take action that that threatens to impair the national security of the United States".

He said the proposed takeover of Qualcomm was "prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited".

Last week, the US government had delayed a shareholder meeting at Qualcomm, which would have paved the way for the deal to progress, to allow for a review by the Committee on Foreign Investment in the United States (Cfius).

The government panel had warned on Sunday, in a letter to both Broadcom and Qualcomm, that the proposed merger had "so far" confirmed national security concerns, pointing specifically to the fact it may allow Chinese companies to become dominant in the wireless technology sector. 

Mr Trump had in November said he was 'thrilled' at Broadcom's relocation of its headquarters Credit: OLIVIER DOULIERY/AFP

The panel added that it had had to speed up its investigation "in light of the action Broadcom has taken in violation of the interim order", as the chipmaker was attempting to accelerate moving its headquarters to the US, after which the deal may have no longer been under Cfius's jurisdiction.

Mr Trump had in November said he was "thrilled" at Broadcom's relocation. The move of its legal and operational base had been announced by the president in the Oval Office. 

Broadcom's attempts to buy Qualcomm had been repeatedly rebuffed by the US group, which had said it was holding out for a higher offer of around $160bn. 

However, even at $142bn the deal would have still ranked as the largest technology takeover ever.