SAN DIEGO (KGTV) - President Trump issued an order Monday prohibiting Broadcom’s attempt to take over San Diego-based Qualcomm, citing national security.
Broadcom had made several efforts to buy the chip maker in recent months. All offers were rejected by Qualcomm, which said the bids undervalued the company.
The most recent offer, made in February, was over $121 billion.
The possible takeover raised security concerns and led to an investigation by the Committee on Foreign Investment in the U.S. In Monday's release, President Trump reportedly cited national security concerns.
"There is credible evidence that leads me to believe that Broadcom Ltd. ... might take action that threatens to impair the national security of the United States," the president said in a release, Bloomberg reported.
The concerns echo issues voiced in a letter to Trump by Congressman Duncan Hunter, who serves California's 50th District including much of San Diego's East County.
"I have seen San Diego defense companies suffer massive theft of intellectual property by agents of China’s government and the defense industrial complex with which it is inextricably entwined," Hunter said in a release. "Fact remains, if Broadcom consumes Qualcomm, theft of their intellectual property by China becomes easier.
Singapore-based Broadcom has voiced the intention to move its headquarters to the U.S. to ease concerns over the proposed takeover. Hunter responded to that intention saying, "press releases of intentions is not the same as physical action."
The takeover attempts coincided with changes in corporate leadership.
On Friday, Qualcomm announced executive Paul Jacobs -- the son of Qualcomm founder Irwin Jacobs - "will no longer serve in an executive management capacity" but "will continue to serve on the Qualcomm Board."
Under the terms of the Presidential Order, all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm, according to the company.
Qualcomm was also ordered to reconvene its 2018 Annual Meeting of Stockholders on the earliest possible date, which is March 23.
If Broadcom had been allowed to buy Qualcomm, it would have made the firm the world’s third-largest chip company behind Intel and Samsung.
Any buyout would also have had a significant impact on San Diego's economy. Qualcomm was founded in 1985 and is one of the region's largest employers. It employs more than 33,000 people worldwide.