President Trump has blocked Broadcom’s Qualcomm takeover, citing that it might end up being a threat to national security, a concern which was also recently brought up back on March 6. The official order from the President comes shortly after it was reported that the U.S. Treasury Department called the Qualcomm deal a security risk. In the official executive order statement regarding the proposed takeover Trump has prohibited the takeover as well as prohibited any mergers, acquisitions, or takeovers that are deemed to be “substantially equal” in nature, which essentially means that no deal like this between the two companies will ever take place in the future either.
In a more specific explanation, the executive order states that all fifteen people that were listed as potential candidates for directors of Qualcomm are now not able to be seated as such, and Qualcomm wouldn’t be able to accept any votes for the candidates should they have come in, nor is it able to accept any nominations for those individuals, which basically keeps th takeover from happening as none of Broadcom’s people can be designated as Qualcomm directors which would be needed for ownership. Both companies are required to go through and finalize the process that signifies the proposed takeover has been abandoned, which includes getting a written certification that such a deal has been stopped. The order also notes that the abandonment has to happen immediately, leaving no room for things to be drawn out longer than it takes to go through the steps that Qualcomm and Broadcom will need to take to complete the abandonment.
There’s no indication of how long the abandonment process may take, but Qualcomm and Broadcom will have to provide the Committee on Foreign Investment in the US with a weekly certification that they are going through any and all necessary steps for the completion of this process, and in addition to the weekly certifications they’ll also need to include detailed documentation of what steps have been taken as of that certification date. What’s more is that the weekly certifications will need to continue all the way through until the written certification of the abandonment completion can be provided to CIFUS as well, which should serve to keep both companies on track until everything is finalized. Though it’s unlikely that either company should fail to comply with the executive order, the Attorney General is stated to have the authority to use any means necessary to ensure that the order is being enforced.