Broadcom formally abandon plan to buy Qualcomm following President Trump's intervention

Broadcom folds following President Trump's decision to block proposed acquisition

Broadcom has confirmed that it will abandon its takeover bid for rival Qualcomm after President Donald Trump blocked the proposed acquisition.

The company revealed today that it has called-off talks with Qualcomm, and will also drop its attempt to persuade shareholders to fill Qualcomm's board with its own nominees - part of its strategy to force through its acquisition.

In a statement, Broadcom claimed that it was "disappointed with the outcome", but had no choice to drop its plans after Trump signed an order blocking any takeover by Broadcom.

President Trump had cited a security committee report warning that the deal would endanger US national security.

He said the government had come across "credible evidence" that a merger between the two companies "threatens to impair the national security of the US".

However, Broadcom disputed the claims, saying it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns".

In a statement, Treasury Secretary Steve Mnuchin supported the decision. He said: "This decision is based on the facts and national security sensitivities related to this particular transaction only."

He said the government is not trying to "make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled US employees."

Regardless of Broadcom's dissatisfaction with the US government decision, it didn't appear to be making much headway in its pursuit of Qualcomm, with the company claiming that Broadcom's bid radically under-valued Qualcomm.

Broadcom nevertheless pressed ahead, hoping to appeal to shareholders over the heads of the Qualcomm board with a plan that would fill it with Broadcom nominees, forcing the company's hand.

As part of its proposals to soothe US fears, Broadcom said it would transfer its headquarters to the US, subjecting itself to US regulators. But officials said that this would still put US security in dangergiven the control, in particular, of valuable 5G technology.

Broadcom added that it will "continue to move forward with its redomiciliation process" and will "comply" with the US Government's decision.

However, it will continue with the March 23rd stakeholders meeting. Qualcomm has yet to comment on the situation.