**UPDATE**
Since yesterday things have changed. This morning, 3/13 at 6am President Trump blocked Broadcom’s proposed buyout of Qualcomm amid national security concerns. According to his statement, “There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom)…through exercising control of Qualcomm incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States.”
Both companies were ordered to disregard the proposed buyout. The order also expressly prohibits all 15 of Broadcom’s proposed candidates for Qualcomm’s board from standing for election. Below is the full statement from the White House.
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
March 12, 2018
Upon review of a recommendation from the Committee on Foreign Investment in the United States and consideration, as appropriate, of the factors set forth in the Defense Production Act of 1950, as amended, the President has made relevant findings and issued the following Order:
ORDER
– – – – – – –
REGARDING THE PROPOSED TAKEOVER OF QUALCOMM INCORPORATED BY BROADCOM LIMITED
By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 721 of the Defense Production Act of 1950, as amended (section 721), 50 U.S.C. 4565, it is hereby ordered as follows:
Section 1. Findings. (a) 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; and
(b) Provisions of law, other than section 721 and the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), do not, in my judgment, provide adequate and appropriate authority for me to protect the national security in this matter.
Sec. 2. Actions Ordered and Authorized. On the basis of the findings set forth in section 1 of this order, considering the factors described in subsection 721(f) of the Defense Production Act of 1950, as appropriate, and pursuant to my authority under applicable law, including section 721, I hereby order that:
(a) 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.
(b) All 15 individuals listed as potential candidates on the Form of Blue Proxy Card filed by Broadcom and Broadcom Corporation with the Securities and Exchange Commission on February 20, 2018 (together, the Candidates), are hereby disqualified from standing for election as directors of Qualcomm. Qualcomm is prohibited from accepting the nomination of or votes for any of the Candidates.
(c) The Purchaser shall uphold its proxy commitments to those Qualcomm stockholders who have returned their final proxies to the Purchaser, to the extent consistent with this order.
(d) 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.
(e) 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 of Qualcomm have been completed.
(f) From the date of this order until the Purchaser and Qualcomm provide a certification of termination of the proposed takeover to CFIUS pursuant to subsection (e) of this section, the Purchaser and Qualcomm shall certify to CFIUS on a weekly basis that they are in compliance with this order and include a description of efforts to fully and permanently abandon the proposed takeover of Qualcomm and a timeline for projected completion of remaining actions.
(g) Any transaction or other device entered into or employed for the purpose of, or with the effect of, avoiding or circumventing this order is prohibited.
(h) If any provision of this order, or the application of any provision to any person or circumstances, is held to be invalid, the remainder of this order and the application of its other provisions to any other persons or circumstances shall not be affected thereby. If any provision of this order, or the application of any provision to any person or circumstances, is held to be invalid because of the lack of certain procedural requirements, the relevant executive branch officials shall implement those procedural requirements.
(i) This order supersedes the Interim Order issued by CFIUS on March 4, 2018.
(j) The Attorney General is authorized to take any steps necessary to enforce this order.
Sec. 3. Reservation. I hereby reserve my authority to issue further orders with respect to the Purchaser and Qualcomm as shall in my judgment be necessary to protect the national security of the United States.
Sec. 4. Publication and Transmittal. (a) This order shall be published in the Federal Register.
(b) I hereby direct the Secretary of the Treasury to transmit a copy of this order to Qualcomm and Broadcom.
DONALD J. TRUMP
THE WHITE HOUSE,
March 12, 2018.
**END UPDATE**
In a release this morning tech giant, Broadcom, announced plans to investors to move their corporate headquarters back to the United States. The plans announcement comes after talks of an acquisition of Qualcomm, a popular mobile phone processor manufacturer. Qualcomm has promised to accept the proposal by Broadcom pending their move back to the states. According to the announcement,
“Broadcom is in the final stages of redomiciling to the U.S. and now expects to complete redomiciliation by April 3rd, 2018. Broadcom’s proposal to acquire Qualcomm has always been premised on the completion of Broadcom’s previously announced plan to redomicile.”
If the $117 billion goes through Broadcom will be one step closer to their goal of positioning themselves as an American company. Additionally, the strategic move of their headquarters back to the United States will be enough to negate the CFIUS (Committee on Foreign Investment in the United States) review of its proposed buyout of Qualcomm. Broadcom will have a special shareholders vote on whether to redomicile to the U.S. after which a court in Singapore will decide whether or not to approve the move.