US President Donald Trump has asked Qualcomm to immediately and permanently abandon the proposed takeover by Broadcom as it may lead to threat to national security. The San Diego based chip maker has received a Presidential Order on Monday that now permanently prohibits Broadcom to acquire Qualcomm, the world’s largest supplier of chipsets for smartphones.
“The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited,” the order of Donald Trump reads.
“There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom), along with its partners, subsidiaries, or affiliates, including Broadcom Corporation, a California corporation, and Broadcom Cayman L.P., a Cayman Islands limited partnership, and their partners, subsidiaries, or affiliates (together, the Purchaser), through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States,” says the order.
Further, the Presidential Order has also disqualified all the Broadcom’s director nominees to participate in the chipmaker’s election for new directors.
The Order has also directed Paul E Jacobs led firm to reconvene its Annual Meeting within 10 days – before 23 March – to re-elect the directors and take a final decision on this matter.
“Qualcomm shall hold its annual stockholder meeting no later than 10 days following the written notice of the meeting provided to stockholders under Delaware General Corporation Law, Title 8, Chapter 1, Subchapter VII, section 222(b), and that notice shall be provided as soon as possible,” the Order reads.
Donald Trump’s Presidential Order has asked the parties to intimate the authority in writing that the Order pertaining to the takeover bid has been adhered.
“The Purchaser and Qualcomm shall immediately and permanently abandon the proposed takeover. Immediately upon completion of all steps necessary to terminate the proposed takeover of Qualcomm, the Purchaser and Qualcomm shall certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that such termination has been effected in accordance with this order and that all steps necessary to fully and permanently abandon the proposed takeover have been completed,” adds the Order.