Broadcom officially gives up on Qualcomm acquisition following USA presidential order

Traders work on the floor of the New

"These transitions come along nearly every decade or so", said Jon Erensen, research director for semiconductors at research firm Gartner.

U.S. Treasury prices settled mostly higher, with the benchmark 10-year yield falling 2 bps to 2.85% while, the two-year yield finished flat at 2.26%. Qualcomm shares fell 4.3 percent. The stock fell 3.11 points to 59.70.

Well before Qualcomm Inc. confronted a hostile takeover bid from Broadcom Ltd.

Although its name isn't widely known outside the technology industry, Qualcomm is one of the world's leading makers of the processors that power many smartphones and other mobile devices. That could leave the USA hobbled in the race to develop next generation, 5G wireless technology, according to people familiar with the matter.

In an attempt to ease those worries, Broadcom last week pledged to make the USA a leader in the race to build 5G networks, saying it would create a $1.5 billion fund to support the effort if took control of Qualcomm.

Had it gone through, the acquisition would have been the largest technology deal in history.

"Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns", the company said, adding that it was reviewing the order. Chinese regulators could just as easily block an American company from trying acquire a Chinese-based company over concerns for its own national security. It's all about China and 5G. But it might slow it down, Fleming said: "They honestly believe they are helping to protect national security by doing this". However, Qualcomm once again rejected the deal.

"Reduction in Qualcomm's long-term technological competitiveness and influence in standard setting would significantly impact USA national security", CFIUS warned.

The Chinese company has described the allegations as "baseless".

Broadcom announced on Wednesday it had formally abandoned its hostile takeover bid for Qualcomm.

CFIUS on March 4 ordered Qualcomm to postpone a shareholder meeting to vote on Broadcom's nominees as directors of the target. Morningstar analyst Brian Colello expects Broadcom to hunt for more deals once it moves to the U.S. That would have seen him losing his director seat.

Hock Tan, CEO of Broadcom, speaks on the floor of the New York Stock Exchange shortly before the opening bell in New York February 12, 2018.

Qualcomm's management and board will face shareholders at a reconvened meeting on March 23, the company said late Monday.

Information for this article was contributed by The Associated Press; by Rob Nikolewski of The San Diego Union-Tribune; and by Dina Bass of Bloomberg News.



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