Trump just dealt Wall Street a $135 million blow

President Donald Trump with Broadcom CEO Hock Tan, who in November was announcing the repatriation of his company’s headquarters to the US from Singapore. Martin H. Simon/Getty Images
  • President Donald Trump issued an executive order Monday blocking Broadcom’s takeover of Qualcomm.
  • Trump said there was “credible evidence” that Broadcom “might take action that threatens to impair the national security of the United States.”
  • Wall Street banks had been set to make a small fortune from advising on the deal.

President Donald Trump issued an executive order Monday blocking the impending takeover of the chipmaker Qualcomm by its Singapore-based rival Broadcom.

In doing so, he most likely sent millions in advisory fees for those working on the bid up in smoke.

Moelis & Company, Citi,Deutsche Bank, JPMorgan,Bank of America Merrill Lynch, and Morgan Stanley were advising Broadcom on the merger. Those banks would have shared $US110 million to $US135 million in fees if the deal had completed, Jeffrey Nassof, a director at the consulting firm Freeman & Co., told Business Insider in November when the bid was first announced.

Bank of America, Citi, Deutsche Bank, JPMorgan, and Morgan Stanley were also helping arrange debt financing, while Silver Lake Partners had agreed to supply $US5 billion in convertible debt financing.

Qualcomm had resisted the takeover offer, hiring Goldman Sachs and Evercore to aid its defence. Had the deal gone ahead, Goldman Sachs and Evercore could have made $US120 million to $US145 million in fees, according to Nassof.

Now that the deal has been blocked, Qualcomm’s advisers are likely to see some payout, though it’s not clear how much.

The blow to Wall Street could be temporary, with Trump’s decision to block the deal potentially triggering another round of bids. Intel has reportedly been watching the Broadcom-Qualcomm situation with interest, for example.