Broadcom Ltd. formally abandoned its attempt to acquire rival chipmaker Qualcomm Inc. after U.S. President Donald Trump blocked the deal citing national security risks.
“Although we are disappointed with this outcome, Broadcom will comply,” the company said in a statement Wednesday, bringing to an official end a months-long battle to land the technology industry’s biggest ever deal.
Singapore-based Broadcom said it will continue to move forward with its plans to shift its official headquarters back to the U.S. and will hold its special shareholder meeting as planned on March 23. The company has also withdrawn its slate of independent director nominees for Qualcomm’s board.
The retreat ends Chief Executive Officer Hock Tan’s most ambitious move yet in his efforts to build a chip empire, after leading Broadcom through a string of deals that have reshaped the $400 billion semiconductor industry in the last several years. The company launched its unsolicited bid in November and was quickly and repeatedly rebuffed by Qualcomm’s management and board. Broadcom had been gathering support from investors to overturn its target’s resistance to a deal.
An investigation of the deal by the Committee on Foreign Investment in the U.S., which reviews purchases of American businesses by foreign investors, confirmed national security threats related to the acquisition by Broadcom, the Treasury Department said in a letter to both companies made public March 12. Later that day Trump took the committee’s recommendation and banned the deal.
CFIUS on March 4 ordered Qualcomm to postpone a shareholder meeting to vote on Broadcom’s nominees as directors of the target. Broadcom aimed to win control of the board so it could advance with its hostile takeover. Treasury said Broadcom violated that order by not giving proper notice about moving its headquarters to the U.S.
The agency also cited the Defense Department’s reliance on products made by Qualcomm, which is based in San Diego. The company has “active sole source classified prime contracts” with the Pentagon, according to a letter from Treasury.
The letter prompted Qualcomm to postpone a March 6 annual meeting, where shareholders were to vote on board candidates, including six nominated by Broadcom. According to voting return data seen by Bloomberg, Broadcom was on course to win control of the board that had been resisting its overture.