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What to Take from What Trump Just Did to Broadcom-Qualcomm Deal

in Broadband News/Broadband's Impact/Spectrum/White House by

BROADBAND BREAKFAST INSIGHT: A great summary of what to take away from the Trump administration's blocking of Broadcom's acquisition attempt for Qualcomm, an action that appears to be have been taken quite precipitously. According to The New York Times' story on the subject, "A presidential action against foreign investment in an American company is rare and has only taken place four times in the past 30 years, according to the law firm Ropes & Gray."

The fallout from Qualcomm’s victory, from Axios

President Trump last night took Broadcom out back and slaughtered its $117 billion pursuit of Qualcomm, in the name of national security.

For capital markets, this is unprecedented. A deal that didn't even exist has been blocked by a U.S. president, who also apparently has the power to determine who can and can't stand for election to a private-sector company's board of directors. And all of it was enabled by a regulatory body focused on foreign acquisitions of U.S. companies, even though the acquirer was scheduled to stop being "foreign" in just a few weeks.

For Broadcom, this is an unanticipated disaster. It got outplayed in D.C. by Qualcomm, and used by the White House as a proxy in the IP protection fight to come against China.

For Qualcomm, this sweet relief is only temporary. Its stock had never gotten close to Broadcom's offer price and plenty of shareholders wanted to replace the entire board. And it still hasn't been able to complete its own deal with NXP Semiconductors, nor settle its legal battles with Apple.

For Intel, this is opportunity. It could just rest easy, or could make a play for either Broadcom or Qualcomm. The former makes more strategic sense — and likely would create fewer anti-trust headaches — but it might not be able to resist the siren song of the latter's willing shareholders.


Source: Axios

Drew Clark is the Editor and Publisher of and President of the Rural Telecommunications Congress. His telecommunications-focused law firm, Drew Clark PLLC, works with cities, rural communities and state economic development entities to promote the benefits of internet connectivity. The articles and posts on and affiliated social media, including the BroadbandCensus Twitter feed are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors.

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