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Singapore-based tech company Broadcom Limited announced Wednesday that it will comply with President Donald Trump's orders and cancel plans to force a takeover of USA chip maker Qualcomm.

Several analysts said the USA government is growing concerned that Huawei will develop such technologies nearly as fast as their American counterparts, narrowing the gap between Chinese and US companies. Trump's order can not be appealed, legal experts said.

Over the weekend, news emerged that Intel was interested in buying Broadcom, which was still looking to buy Qualcomm, which wants to acquire NXP.

In an ultimately futile attempt to assuage concerns, Broadcom said last week it was committed to making the United States "the global leader in 5G".

As such, Broadcom and Qualcomm "shall immediately and permanently abandon the proposed takeover", Trump ordered.

Qualcomm repeatedly rebuffed the offer, leading Broadcom to nominate a slate of independent directors in a proxy battle.


Broadcom hit back, however, saying it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns".

Technalysis Research president Bob O'Donnell said Broadcom has gained a reputation as a cost-cutter while Qualcomm - which makes most of the world's microprocessors for smartphones - has been focused on innovating.

Lewis said it was possible U.S. intelligence found something to warrant concern over the deal even as Broadcom was taking steps to redomicile in the United States by April 3, which would negate a CFIUS investigation. "If Broadcom acquires Qualcomm, the latter would likely exit several businesses or consolidate its operations with Broadcom - allowing Chinese companies to quickly fill in any void".

CFIUS noted that a Broadcom-Qualcomm merger could weaken Qualcomm's leadership in the field.

Despite the fierce resistance of Qualcomm to such a merger - including the price point, Broadcom's aggressive plans to replace the board, and regulatory concerns - Broadcom said it "sincerely appreciate [s] the significant support we received from the Qualcomm and Broadcom stockholders throughout this process". At a Senate Intelligence Committee meeting in February, FBI Director Christopher Wray said any company "beholden to foreign governments that don't share our values" should not be able to "gain positions of power" inside USA telecommunications networks.

The decision was a huge blow to Broadcom, in the process of relocating its legal headquarters to the United States in an effort to assuage those concerns.


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