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Saturday 22 September 2018

Broadcom pulls Qualcomm bid after Trump veto but steps up its US plans

Broadcom expects to continue with its plan to redomicile to the US. Photo: Reuters
Broadcom expects to continue with its plan to redomicile to the US. Photo: Reuters

Reuters

Singapore-based Broadcom has formally withdrawn its $117bn (€94bn) bid to acquire Qualcomm - two days after US President Donald Trump blocked the attempt, citing national security concerns.

The company said it has also withdrawn its slate of independent director nominees for US-based Qualcomm's annual shareholder meeting.

Broadcom, however, expects to continue with its plan to redomicile to the US, which will give it a freer hand to pursue acquisitions there.

"Although we are disappointed with this outcome, Broadcom will comply with the order," the chipmaker said. Broadcom's board met late on Tuesday to formalise plans to move its base to the United States, at a cost of about $500m a year under a higher tax rate, the sources told Reuters.

Being based in the United States as opposed to Singapore should make it easier for Broadcom to make acquisitions of US companies without falling under the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS), which reviews purchases of American businesses by foreign investors.

An investigation of the Qualcomm deal by the committee had confirmed national security threats related to the acquisition by Broadcom, the Treasury Department said in a letter to both companies made public on March 12.

Later that day Trump took the committee's recommendation and banned the deal.

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