Home Business Trump derailed big tech deals like AT&T, Broadcom

Trump derailed big tech deals like AT&T, Broadcom

James Stewart, as George Bailey, points at Lionel Barrymore, as Mr. Potter, in a scene from It’s a Wonderful Life.

Bettmann | Getty Images

Christmas movies often explore alternate timelines. Ebenezer Scrooge runs from his future in “A Christmas Carol.” George Bailey views what life would have been like without him in “It’s a Wonderful Life.” Kevin McCallister gets a taste of life without his family in “Home Alone.”

In the spirit of the holidays, let’s take a look back at how outgoing U.S. president Donald Trump handled some of the biggest technology events of the last four years — and wonder what could have been if not for the government’s intervention.

2017: DOJ blocks AT&T’s $85 billion Time Warner deal

Randall Stephenson, chairman and chief executive officer of AT&T Inc., left, speaks while Jeffrey ‘Jeff’ Bewkes, chairman and chief executive officer of Time Warner Inc.

Patrick T. Fallon | Bloomberg | Getty Images

2018: Trump kills Broadcom’s hostile bid for Qualcomm

In early March, the Trump administration got involved. The Committee on Foreign Investment in the United States (CFIUS) sent a letter to Broadcom and Qualcomm lawyers listing national security risks that could arise from exploiting or compromising Qualcomm’s assets through arrangements with “third party foreign entities.” It also broached concerns about Broadcom’s reputation for cutting research spending, an concern that Microsoft and Google shared, as CNBC earlier reported.

About a week later, Trump dropped an unprecedented hammer. He was blocking the deal on national security concerns, even before an agreement between the two companies could be reached. The move significantly expanded CFIUS’s powers and effectively chilled U.S. cross-border semiconductor deals for the remainder of the Trump presidency.

Potentially as retaliation for Trump’s Broadcom decision, China regulators didn’t approve Qualcomm’s NXP acquisition. Qualcomm scrapped the deal.

Alternate timeline: Broadcom buys Qualcomm, becoming a global semiconductor superpower. It doesn’t buy CA Technologies for about $19 billion or Symantec’s enterprise business for $10.7 billion. NXP stays independent as Broadcom chooses not to acquire NXP. There are billions of other cross-border chip deals in the next three years, making bankers and lawyers very happy.

2019: Trump bans Huawei in U.S. markets

U.S. President Donald Trump waves before boarding Air Force One at Joint Base Andrews, Maryland, U.S., December 12, 2020.

Tom Brenner | Reuters

The ban also hurt both companies’ global 5G infrastructure development — arguably the point of the order.

Weeks later, Trump formally politicized his action, saying Huawei’s U.S. fate could be resolves as part of a broader trade deal with China.

But a deal didn’t quickly materialize. In January 2020, the U.S. and China signed a partial trade deal with China. Huawei and ZTE weren’t a part of it. In July 2020, under heavy pressure from the Trump administration, the U.K. banned Huawei components from its 5G network after initially resisting.

Trump extended the Huawei/ZTE executive order in May 2020 for another year. President-elect Joe Biden’s administration will have to decide next moves in May 2021.

Alternate timeline: U.S. companies build speedier 5G networks for less money using Huawei components, but the mystery around how safe China’s technology is within U.S. borders persists. Huawei’s Honor phones become low-cost alternatives to Apple iPhones and Samsung Galaxy phones in the U.S., but overall it remains a minor player in the smartphone wars.

2020: Trump threatens to ban TikTok

Chairman of Direct-to-Consumer & International division of The Walt Disney Company Kevin Mayer took part today in the Disney+ Showcase at Disney’s D23 EXPO 2019 in Anaheim, Calif., August 23, 2019.

Jesse Grant

ByteDance said it never shared, nor would share, information with the Chinese government. Still, the company began holding sale talks with Microsoft and Oracle to stay operational in the U.S. Days before announcing a deal, TikTok CEO Kevin Mayer announced he would resign rather than running TikTok as a division of a larger U.S. technology company.

Just as ByteDance prepared to announced a deal, the Chinese government added new restrictions on a sale, sending the parties back to the drawing board.

Working with the Trump administration, ByteDance agreed to sell a 12.5% stake in TikTok Global to Oracle and a 7.5% stake to Walmart. Additionally, Oracle would serve as TikTok’s “trusted technology partner,” housing U.S. data on its servers.

But China still needed to approve a deal — and it never did. By refusing to agree to the sale, China backed Trump into a corner. He could either ban the application, as he threatened, or he could let the issue die.

It appears the Trump administration has chosen the latter option. To date, no TikTok deal has taken place. ByteDance continues to own the company. It’s unclear if or when a transaction will occur.

Alternate timeline: Kevin Mayer is still TikTok CEO. Everyone involved in this debacle has improved mental health and sleep.

WATCH: TikTok saga will ultimately reach a ‘peaceful resolution’: Jefferies analyst