Qualcomm has no interest in reviving NXP takeover

Mae Love
December 4, 2018

NXP is the world's largest chip supplier to the automotive industry and unlike smartphone markets - which have become mostly saturated in the US, China, and western Europe - autonomous driving remains an area of rapid growth with bags of future potential as AI technologies are rolled out.

In July, Qualcomm, which is based in California, confirmed that the company is terminating its proposed takeover of its rival NXP which is based in The Netherlands.

Chinese regulators did not have immediate comment. With NXP being the biggest supplier to the industry, Qualcomm could be forced to reopen the deal amidst a grim outlook for the mobile chip industry in the coming months.

Qualcomm said Monday the clock ran out on the merger, and it is ready to move on.

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As of this writing, it is still not clear whether Qualcomm and NXP will pursue the merger again.

Several deals by semiconductor companies were put on ice after the Qualcomm/ NXP deal fell through, simply because they had a footprint in China and required regulatory approval there.

Qualcomm and NXP did not lobby for the Trump administration to bring up the abandoned deal in its meeting with Xi and other Chinese officials on the sidelines of the G20 summit in Buenos Aires on Saturday, which was dominated by negotiations over trade tariffs, according to sources close to the companies. Qualcomm has a large presence in China so they were not left with any real options except to cancel the deal. Qualcomm even paid a $2 billion penalty in July for breaking off the merger. This deal was so important to Qualcomm that in their 2017 Annual Report, the approval of the deal was the first risk listed before revenue decline from licenses and increased competition. Mellanox did not immediately respond to requests for comment. NXP has also announced its own $5 billion share buyback program.

Regulators in eight countries approved the deal, including in the USA and Europe.

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