Trump bans all foreign takeovers of big US tech companies

Trump issued an executive order yesterday explicitly stopping Broadcom, which is based in Singapore, from buying Qualcomm, in what would have been the biggest tech takeover ever, valued at $117 billion. The primary reason was that CFIUS, a Treasury Department committee that reviews such sales, said it would be deleterious to the US if China got control of 5G technology.

The executive order also specifically blocks ANY large tech takeover by foreign firms. It also blocks Broadcom from domiciling in the US, then taking over Qualcomm, which Broadcom was planning to do to circumvent CFIUS.

The problem with such actions is they inevitably cause other countries to retaliate. And, as pointed out below, 5G technology is public domain. Also, Trump rarely if ever does anything unless it benefits him personally.


This was in response to Broadcom’s announcement on Friday – fast-moving stuff! – that it would move forward a shareholder vote on its US domiciliation to March 23, from May 6, which would have allowed Broadcom to move its paper headquarters to the US by April 3, just before Qualcomm’s shareholder vote on the merger.

The executive order says:

The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited.

Any transaction or other device entered into or employed for the purpose of, or with the effect of, avoiding or circumventing this order is prohibited.

Treasury said:

“While the United States remains dominant in the standards-setting space currently, China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover. Given well-known U.S. national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States.”

From the comments on Wolfstreet.

I’m curious as to how this will play amount in the tech industry. Most the articles thus far seem to focus largely on the actual story without much opinion. The industry, especially its executives, are not big fans of Trump, but will they support this action, which defends one of the industry leaders?

5G technology is in the public domain! NASA and Geoff Brown of M2Mi developed this technology ten years ago. Currently, Samsung, Intel, Nokia, Huawei, Ericsson, and ZTE are also working on 5G applications. South Korea demonstrated 5G technology last month at the Olympics, but perhaps President Trump is unaware of these trivial details???

This is another example of the mindless belief in free trade. It would be obvious to a plastic pink lawn pelican that when you run $600 billion trade deficits for a decade, foreigners are going to be holders of shitloads of your currency that they have to do something with.

Does the president own shares in either company?

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