Patent Riffs and Links: Trump Nixes Broadcom’s Takeover of Qualcomm

Trump Orders Broadcom to Cease Attempt to Buy Qualcomm | WSJ
Security concerns? “While Broadcom is a Singapore-based company, the U.S. panel that vets foreign deals said that the bid could have had implications for the U.S.’s broader technological competition with China. That panel, the Committee on Foreign Investment in the U.S., known as CFIUS, said it was worried that Broadcom would stymie research and development at Qualcomm given its reputation as a cost-cutting behemoth. CFIUS said such a move could weaken Qualcomm—and thereby the U.S.—against foreign rivals racing to develop next-generation wireless technology known as 5G, such as China’s Huawei Technologies Co.”

Trump blocks Broadcom’s bid for Qualcomm over national security concerns | MONEY.CNN
Precedent? Trump’s ability to block the deal stems from a decades-old law that gives the president the authority to stop foreign firms from taking over US companies if there is a national security concern. And Monday was not the first time the power has been used…In recent years, presidents have given particular scrutiny to semiconductor companies…Last September, Trump stopped the takeover of the American chip maker Lattice Semiconductors by Canyon Bridge Capital Partners, a private equity firm with ties to China…And in 2016, President Barack Obama barred a Chinese-owned business from buying part of Aixtron. The German semiconductor company has US operations in California.”

How Broadcom vs. Qualcomm went from hostile takeover bid to a Trump blockade | MARKETWATCH
History: “Broadcom Ltd. and Qualcomm Corp. appeared to be in a pretty standard hostile-takeover fight for months: Broadcom made offers, the Qualcomm board denied them, so Broadcom tried to convince Qualcomm shareholders to reshape Qualcomm’s board to be more friendly toward a merger…That script was upended last week, with a surprising intervention by the U.S. government that ratcheted quickly and culminated with President Donald Trump saying he was blocking the record-breaking deal late Monday…Qualcomm QCOM, -0.35% , based in San Diego, invented the first digital cellular CDMA technology, which became an industry standard in the early days of cellphones. The company also has developed communications chips and it licenses a vast portfolio of wireless technology patents to other companies…

…Broadcom AVGO, +3.57% was also a communications-chip company founded in Southern California, before it was purchased by Avago Technologies in 2015 for $37 billion. Avago was the chip business of the former Hewlett-Packard Co. before being spun out as part of Agilent Technologies A, -0.59% in the late 1990s, then into its own company with the help of private equity in 2005. Avago put its corporate headquarters in Singapore, which offered tax benefits, and has been very acquisitive beyond the Broadcom acquisition, including the purchases of U.S. companies LSI Logic and Brocade.”

Bloomberg | BLOOMBERG
Tough: “The president’s order on Monday blocking Broadcom’s $117 billion bid for Qualcomm is the latest sign of Trump’s tough stance on foreign takeovers of U.S. technology and is part of a broader move to contain China on trade. The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property…Only five takeovers of American firms have been blocked by U.S. presidents on national security grounds since 1990. Of those, Barack Obama blocked two deals during his two terms. Trump has blocked two in six months.”

Broadcom accelerates plans to move headquarters address to U.S. from Singapore amid heightened federal scrutiny of Qualcomm deal – Silicon Valley Business Journal | BIZJOURNALS
From earlier in the day: “Silicon Valley technology giant Broadcom is accelerating its plan to move its headquarters back to the United States, telling investors Monday that it hopes to complete the process by April 3. However, the U.S. government told the company in a recent letter than it violated an order by not giving federal regulators with the Committee on Foreign Investment in the United States sufficient notice of its plans to move it corporate address to the U.S.”