Back in November in an unexpected story, we learned about Broadcom’s interest in acquiring Qualcomm if the price was right. Qualcomm rejected the initial offer of $130 billion, but Broadcom never gave up and continued coming back with other ideas. However, the two don’t seem like they’ll be negotiating an acquisition anymore since the US Government essentially just blocked any takeover from happening.
For the first time in many years, we’ve seen the US Government get involved with companies and topics we talk about often here on Droid Turf. Those being, net neutrality, smartphone manufacturer Huawei, and now chip-maker Qualcomm. Qualcomm is a very large and successful company and is the one that makes the Snapdragon processors used in many Android smartphones and wearables.
We never expected a deal between the two chip producers in the first place considering how large and disruptive it would be. But to make sure a buyout does not happen, US President Trump issued an executive order on March 12, killing the potential multi-billion dollar deal.
The reasoning behind the block is a matter of US national security. The US Government does not want Broadcom (not a US company) to takeover Qualcomm as the result would be Chinese OEMs dominating the market. The US Government doesn’t want to risk Chinese spying, the same reason it doesn’t want you to buy a Huawei smartphone in the US. This was basically the same reason US carriers declined to approve Huawei’s Mate 10 Pro for sale, but that’s getting into a whole different chain of events.
Broadcom is not happy about the block, which should be expected. Qualcomm has not yet commented. We’re probably better off that the two competitors will remain separate business entities. If we hear anything further, we’ll let you know, but I’d expect chatter to quiet down now that a deal can’t be arranged.