ibusinesslines.com
ibusinesslines.com December 17, 2018


Qualcomm Rules Out Another Bid for NXP After China Opens Door

05 December 2018, 01:24 | Kelvin Horton

Qualcomm insists $44bn takeover of NXP is dead despite easing of China-US trade tensions

U.S. and China Talk Up Qualcomm-NXP Merger. There’s Just One Problem: The Deal Is Dead

White House economic adviser Larry Kudlow said on Monday that President Donald Trump put the issue of US chipmaker Qualcomm Inc's now abandoned acquisition of Dutch peer NXP Semiconductors NV on the table for talks with Chinese President Xi Jinping.

US chipmaker Qualcomm Inc. has ruled out any possibility of a renewed bid for rival NXP Semiconductors after President Xi reopened the doors for a new bid during his meeting with President Trump over the weekend.

China's official statement after the meeting between Xi and Trump did not mention Xi's willingness to consider approving a $44 billion deal for Qualcomm to purchase NXP if the deal was put before him again.

Qualcomm scrapped its proposed $44 billion bid for rival chip-maker NXP in July after an nearly two-year wait for approval, as tensions between the USA and China escalated.

However, Reuters reports that Qualcomm representatives made it clear through an email, that the company considers the matter closed.


Chinese regulators did not have immediate comment.

Qualcomm scrapped its proposed $44 billion (R 602 bn) bid for rival chip-maker NXP in July after an nearly two-year wait for approval, as tensions between the U.S. and China escalated. Qualcomm spent United States dollars 22.6 billion on share buybacks in the 12-months ended September, using up the cash reserves it had set aside for the acquisition and ending any possibility of a renewed bid. Further aggravating this is the fact that Qualcomm even paid a $2 billion penalty in order to distance itself away from the deal.

China's foreign ministry declined to comment on Qualcomm during a regular media briefing on Monday. NXP has also announced its own $5 billion (around Rs. 35,200 crores) share buyback program. It has spent more than US$20 billion in share buybacks in the last 12 months. Now, chip companies may be more optimistic about their regulatory chances in China. The US government suggested that it could revisit the plan, as China was open to approving the deal.

USA lawmakers also passed reforms earlier this year that increased CFIUS' scrutiny of deals.



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