Citing national security issues, US President Donald Trump has ordered that Broadcom immediately abandon its proposed acquisition of Qualcomm.
The US President, in the presidential order issued Monday, wrote that there is "credible evidence" that Broadcom's proposed move to exercise control of Qualcomm "might take action that threatens to impair the national security of the United States."
The order is in response to Singapore-based Broadcom's proposal to acquire San Diego-based Qualcomm for $121bn, a move that Qualcomm's board of directors unanimously rejected last month.
Trump, in his rejection of the Qualcomm acquisition, wrote, "The proposed takeover of Qualcomm by the Purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected (sic) directly or indirectly, is also prohibited."
He also wrote that the 15 people proposed by Broadcom as candidates for the Qualcomm board of directors are disqualified from standing for election as directors of Qualcomm.
Broadcom and Qualcomm are also ordered to certify in writing to the Committee on Foreign Investment in the United States (CFIUS) that they have taken all steps to abandon the merger.
Last month, the board of Qualcomm unanimously rejected a $121bn acquisition offer from Broadcom, arguing that the amount didn't fairly value the company.
The proposal, according to Qualcomm's board of directors, didn't ascribe any value to Qualcomm's NXP acquisition in 2016, or the expected resolution of licensing disputes and the greater opportunity in the 5G market.
Qualcomm and Broadcom both are leaders in the mobile market, and both rapidly expanding their portfolios to power the emerging Internet of Things (IoT).