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Federal regulators last week ordered a delay in a vote by Qualcomm stockholders over a proposed sale to Singapore-based Broadcom, with some members of Congress expressing concerns about a foreign interest controlling a domestic firm that performs “sensitive work” on behalf of the U.S. government.
Trump’s order echoed that concern, saying a takeover by Broadcom “threatens to impair the national security of the United States.”
Under the terms of the order, all of Broadcom’s director nominees were disqualified from standing for election as directors of Qualcomm, and the company was directed to reconvene its 2018 stockholders on the earliest possible date, which is March 23.
Broadcom said it is reviewing the order, adding that it “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns.”
San Diego Mayor Kevin Faulconer tweeted thanks for the president’s action, saying he recognized the tech giant’s “vital contributions to the country and San Diego.”
We thank President Trump for recognizing Qualcomm’s vital contributions to the country and San Diego. We look forward to Qualcomm continuing its important work driving innovation, stimulating our regional economy and creating good paying jobs for San Diegans.
— Kevin Faulconer (@Kevin_Faulconer) March 13, 2018
Although Broadcom is incorporated and based in Singapore, CEO Hock Tan announced late last year while visiting Trump at the White House that the company would return its corporate headquarters to the United States, likely using San Jose as a base. It said Monday the move would be completed by April 3.
Buying Qualcomm would make Broadcom the third-largest chip maker, behind Intel and Samsung Electronics. The combined business would become the default provider of a set of components needed to build each of the more than 1 billion smartphones sold every year.
Broadcom is offering $79 per share in a deal worth over $100 billion to acquire the wireless pioneer. Its stock was trading after hours at $266, up 1 percent, while Qualcomm’s was trading around $60, down over 4 percent.
The company’s hostile takeover attempt has come at a vulnerable time for Qualcomm, which has been embroiled in a long-running legal dispute with Apple and is facing several large fines from governing bodies across the globe, including a $1.23 billion fine recently levied against the company for breaking the European Union’s antitrust laws. Qualcomm said it would challenge that fine.
Qualcomm is one of the San Diego area’s largest private employers, and the family of co-founder Irwin Jacobs is one of the area’s most generous philanthropists.
— From Staff and Wire Reports
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