President Donald Trump's unprecedented decision to block Broadcom's attempt to acquire Qualcomm — even before a deal had been reached — will deter companies from looking for growth beyond national borders, experts say.
Broadcom officially withdrew its bid Wednesday.
Trump said he had "credible evidence" that the deal had the potential to threaten the national security of the United States. Broadcom is based in Singapore and in California and has ties with China. Qualcomm is based in San Diego.
Trump's decision to block Broadcom's $117 billion bid could change how all companies, in all sectors, view cross-border deals, said Frank Aquila, M&A partner at Sullivan & Cromwell.
"This is going to make cross-border transactions much less likely to happen in certain sensitive sectors," said Aquila.
"But beyond that, it could very well have a chilling effect on a range of transactions in any number of sectors. We know that certain countries have staked out claims to certain companies that have no national security risks, just because they're national champions or culture carriers. The United States has always considered this to be antithetical to free trade and open markets. We've never thought of blocking those sort of deals. Now that is not entirely clear."
Pre-emptively stopping a deal of this magnitude before a deal agreement marks a turning point — at least while Trump is president — in how the U.S. views foreign deals, Aquila said.
Other countries have been more openly political in their reactions toward recent acquisitions.