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After President Donald Trump issued an executive order blocking Broadcom's proposed takeover of U.S. chipmaker Qualcomm, the Singapore-based company will formally announce an end to acquisition efforts, a report said Tuesday.
Citing sources familiar with the matter, Bloomberg reports Broadcom is preparing to issue a statement Wednesday morning formally announcing its intent to end a hostile pursuit of industry rival Qualcomm.
The expected announcement comes one day after Trump blocked Broadcom's bid on the basis of national security concerns. U.S. government agencies, namely the Committee on Foreign Investment in the United States (CFIUS), expressed concern over the proposed purchase, saying a takeover could weaken Qualcomm's position in the global semiconductor industry.
In a statement on the matter, the White House on Monday said there is credible evidence that Broadcom, through a newly minted Qualcomm acquisition, "might take action that threatens to impair the national security of the United States."
Trump's directive blocks Broadcom from acquiring, taking over or merging with Qualcomm, and orders both companies to cease any efforts toward those goals.
Broadcom first made a play for Qualcomm's business in November when it offered $130 billion for the company. Qualcomm refused the proposal and two others like it over the ensuing months.
In a letter dated March 4, CFIUS said it was investigating the takeover and ordered Qualcomm to postpone a shareholders meeting that was scheduled to vote on Broadcom nominees to the chipmaker's board. Broadcom was looking to install six directors to Qualcomm's 11-member board in a bid to push its agenda forward.
In an attempt to skirt CFIUS jurisdiction, Broadcom moved to redomicile to the U.S., effectively making the firm an American company. CFIUS in a letter told the firm to provide five business days' notice before taking any such action, but Broadcom last week said it planned to hold its own shareholder meeting seeking approval to start the redomiciliation process.
Just prior to Trump's order, Broadcom said it would redomicile by April 3. Whether the firm will move forward with plans to relocate are unknown.