Trump Is Right to Quash the Qualcomm Merger

Kind of a big deal.

Photographer: Simon Dawson/Bloomberg

President Donald Trump's decision to quash an overseas bid for Qualcomm Inc. was almost certainly the right thing to do. That it came with little warning and not much explanation, however, suggests some significant flaws in the way the U.S. evaluates such deals.  

Broadcom Ltd., based in Singapore, had made an unsolicited $117 billion offer to acquire Qualcomm, a leading U.S. chipmaker. Amid scrutiny of the bid by the Committee on Foreign Investment in the U.S. – a panel that reviews such deals for security concerns — Trump issued an executive order blocking it. It was only the fifth such deal ever held up by a U.S. president, and the largest by far.

Although Trump didn't explain his decision, the bid raised some obvious national-security concerns. Qualcomm is a major supplier for the Pentagon and holds numerous classified contracts. Its facilities are subject to a security clearance that could be jeopardized by foreign ownership. An acquisition of this kind was bound to raise red flags, whoever was doing the buying.