The veto is on national security grounds and follows last week’s intervention by the US Treasury department – which leads an inter-agency called the Committee on Foreign Investment in the United States – ordering Qualcomm to delay by 30 days a shareholder vote on whether six of the company’s directors should be replaced by candidates nominated by Singapore-based rival Broadcom.
Broadcom had offered US$140bn for its US competitor but the terms had failed to secure the support of the Qualcomm board.
Donald Trump sent a letter to Singapore-based chip maker Broadcom asking it to cease its attempt to take over US rival Qualcomm, citing national security concerns raised by the deal. https://t.co/plJYWZ7gER— MIT Tech Review (@techreview) March 12, 2018
Broadcom had reportedly seen the writing on the wall and had offered to move its headquarters to the US should it succeed in acquiring Qualcomm but the gesture cut no ice with the US authorities.
Qualcomm is considered to be a leader in the field of chip design for 5G wireless technology.
"We are all at the start of a race, and you have 5G as a crown jewel that everyone wants to participate in - and every region is racing towards that,” Mario Morales, vice president of enabling technologies and semiconductors at market research firm IDC told the BBC.
Shares in Broadcom were up 0.4% in pre-market trading while Qualcomm was down 4.8%.