March 12 (UPI) -- President Donald Trump on Monday blocked Singapore-based Broadcom's $117 billion hostile takeover bid of Qualcomm, citing national security concerns.
Trump said "there is credible evidence that leads me to believe that Broadcom Ltd." by acquiring San Diego-based chip-maker Qualcomm "might take action that threatens to impair the national security of the United States."
Acting on a recommendation by the Committee on Foreign Investment in the United States, which reviews acquisitions of U.S. firms by foreign investors Trump chose to block the deal.
"The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited," the order said.
CFIUS told lawyers from both companies Broadcom had repeatedly violated one of its orders in its pursuit of Qualcomm and its investigation had confirmed the national-security risks, the Wall Street Journal reported.
The panel said it was concerned Broadcom would hold back research and development at Qualcomm and weaken it against foreign rivals.
Qualcomm shareholders were set to vote last week on whether to replace six of its 11 directors with Broadcom candidates when the CFIUS delayed the scheduled board meeting to review the takeover.
Broadcom blamed Qualcomm for the intervention and called the move by CFIUS "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."
Trump's order disqualified all 15 individuals listed as potential candidates from standing for directors of Qualcomm.
"Qualcomm is prohibited from accepting the nomination of or votes for any of the Candidates," the order states.
The order also directed provide a certification of termination of the proposed takeover to CFIUS and certify on a weekly basis that they are in compliance to fully and permanently abandon the takeover.