President Trump has issued an executive order blocking Singapore-based Broadcom’s $117 billion takeover of U.S. chipmaker Qualcomm on national security grounds.

Additionally, Reuters reports that the Trump order says all 15 candidate directors proposed by Broadcom are disqualified for Qualcomm board.

Trump’s decision confirms what Hayman Capital’s Kyle Bass explained last week.

Bass explained on CNBC why he didn’t think the U.S. can allow Broadcom’s potential purchase of Qualcomm to go through because of QCOM’s importance to developing 5G technology:

“We can’t possibly let the Broadcom Qualcomm merger go through. We can’t possibly allow that technology and that technological know how” to fall into hands of others.”

The U.S. government is also worried about the issue.

The Treasury Department wrote a letter Monday to lawyers involved in the deal expressing concern about Chinese competitors in 5G network development, which raises national security concerns over the Broadcom-Qualcomm merger.

Broadcom said in a letter to Congress regarding its offer to acquire Qualcomm that the company will not sell any “critical national security assets” to any foreign companies.

But that was not enough to satisfy the Committee on Foreign Investment in the U.S. (CFIUS).

As Bloomberg reports, the president acted on a recommendation by CFIUS, which reviews acquisitions of American firms by foreign investors. The decision to block the deal was unveiled just hours after Broadcom Chief Executive Officer Hock Tan met with security officials at the Pentagon in a last-ditch effort to salvage the transaction.

“There is credible evidence that leads me to believe that Broadcom Ltd.” by acquiring Qualcomm “might take action that threatens to impair the national security of the United States,” Trump said in the order released Monday evening in Washington.

Trump’s order came after CFIUS found that Broadcom’s acquisition would undermine Qualcomm’s leadership in 5G wireless technology, opening the door for China’s Huawei Technologies Co. to become dominant.

And just like that, the China M&A premium in the tech market disappears…


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