Left with little other choice after President Donald Trump stepped in to stop it, Broadcom announced Wednesday that it has withdrawn and terminated its unsolicited bid for Qualcomm.
Broadcom also announced it has withdrawn a slate of independent director nominees for Qualcomm's 2018 Annual Meeting of Stockholders, which has been moved to April 5 amid an investigation into Broadcom’s proposal by the U.S. Treasury Department’s Committee on Foreign Investment in the United States (CFIUS). CFIUS reportedly found that Broadcom had violated an interim order issued in March because Broadcom, on at least three separate occasions, had taken action toward redomiciliation in the U.S. without providing the organization with at least five business days notice.
On Monday (March 12), Trump blocked the merger attempt over concerns that it posed a national security risk – a concern that Broadcom repeatedly said was unfounded.
Despite losing out on Qualcomm, Singapore-based Broadcom, said it will move forward with a process to redomicile to the U.S. and will hold its stockholder meeting as planned on March 23. Broadcom has said it expects to complete that process by April 3.
“Although we are disappointed with this outcome, Broadcom will comply with the Order,” Broadcom said. “Broadcom's Board of Directors and management team sincerely appreciate the significant support we received from the Qualcomm and Broadcom stockholders throughout this process.”
Broadcom also said it appreciated the following statement from U.S. Treasury Secretary and CFIUS chair Steven Mnuchin made March 12: "This decision is based on the facts and national security sensitivities related to this particular transaction only and is not intended to make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled U.S. employees."
Though Qualcomm provided Broadcom a “mark-up” to the Broadcom proposal that aimed to resolve some of the issues it had with Broadcom’s bid, Qualcomm fought Broadcom all the way through, believing that the financial aspects of the offer undervalued Qualcomm.