Broadcom is headquartered in Singapore, but has a significant business presence and offices in the United States. In fact, the company was in the process of relocating its headquarters to the U.S., but the executive order states that there is "credible evidence" that Broadcom might "take action that threatens to impair the national security of the United States."
The order goes even further, with language that forbids Broadcom from having its hand-picked board members elected to Qualcomm's board of directors:
All 15 individuals listed as potential candidates on the Form of Blue Proxy Card filed by Broadcom and Broadcom Corporation with the Securities and Exchange Commission on February 20, 2018 (together, the Candidates), are hereby disqualified from standing for election as directors of Qualcomm. Qualcomm is prohibited from accepting the nomination of or votes for any of the Candidates.
At last count, Broadcom was offering $117 billion for Qualcomm, with its headquarters based in San Diego. But the terms of the deal were shaky at best from the beginning, with Qualcomm rebuffing Broadcom every step of the way. In late February, Qualcomm became a little bit more receptive to Broadcom's advances (likely an effort to quell investor concerns over maintaining realistic valuation of the company), but still expressed a significant disconnect over the valuation Broadcom placed on the company, and the high probability that the deal wouldn't pass regulatory muster.
The concerns on the latter front came to fruition a week ago when the Committee on Foreign Investment in the United States (CFIUS) asked Qualcomm to delay its planned March 6th annual shareholders meeting for 30 days, citing national security concerns.
Shortly after the CFIUS handed down its decision, Broadcom went on the attack, alleging that Qualcomm went behind its back and basically "cried" to the regulatory board to take action. "This was a blatant, desperate act by Qualcomm to entrench its incumbent board of directors and prevent its own stockholders from voting for Broadcom’s independent director nominees," said Broadcom in a statement.
"Broadcom’s dismissive rhetoric notwithstanding, this is a very serious matter for both Qualcomm and Broadcom," Qualcomm fired back in response. "Broadcom’s claims that the CFIUS inquiry was a surprise to them has no basis in fact. Broadcom has been interacting with CFIUS for weeks and made two written submissions to CFIUS."
This isn't the first time that President Trump has used his power to block foreign investment into a U.S. company. In September 2017, he blocked Chinese firm Canyon Bridge Fund from acquiring Lattice Semiconductor Corporation (which is based on Oregon), citing national security concerns.
There was even more at stake this time around, however, given how dominant Qualcomm is in the mobile and wireless sectors. Qualcomm makes the chips that are employed in the bulk of Android and Apple smartphones around the world, and the LTE baseband chips that provide cellular connectivity in various battery-powered devices. In addition, Qualcomm will be one of the dominant players in the emerging 5G wireless standard, and it has a portfolio of products that will lead the charge.
It was reported earlier this year that the Trump administration wants to build a national, centralized 5G wireless network that would be capable of fending off attacks from countries like China and Russia. Companies like Qualcomm would be critical in making such a network possible, so it should come as no surprise that the administration would be against any foreign power getting their hooks into an a critical American tech resource (even if it wasn't the Chinese this time around).
Now that this Qualcomm-Broadcom drama is apparently off the table, we have the feeling that any inklings that Intel had to get in on the action are likely also sidelined as well.