Qualcomm says NXP deal is off

Qualcomm Rules Out Another Bid for NXP After China Opens DoorMore

Qualcomm Rules Out Another Bid for NXP After China Opens DoorMore

The American chip manufacturer Qualcomm no longer sees any salvation in an acquisition of its Eindhoven-based industry partner NXP.

After one such meeting between President Trump and President Xi, it was reported that China is now open to approving the previously unapproved Qualcomm-NXP deal if it is to be presented again.

Qualcomm told Reuters that although it welcomed the development, the deadline for the deal to be completed had passed and it had no interest in resurrecting the deal. "While we were grateful to learn of President Trump and President Xi's comments about Qualcomm's previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal".

Qualcomm considers the matter closed.

Now, Yao, senior analyst at TrendForce says that Qualcomm could be forced to reconsider the move even after backing out because of unimpressive mobile chip sales this year. Due to trade tensions Chinese antitrust authorities originally withheld their approval of the Qualcomm-NXP deal, causing it to eventually fall through.

Qualcomm walked away in July from the proposed acquisition of NXP after failing to secure Chinese regulatory approval, becoming one of the most high-profile victims of the escalating US-China trade war at the time.

"Although that acquisition can not be resuscitated, Xi's comment reveals in plain sight that Chinese antitrust policy is inherently politicized", said Scott Kennedy, a China expert at the Center for Strategic and International Studies in a blog post.

The Trump administration had unsuccessfully lobbied the Chinese government earlier this year to give its blessing to the deal. Since Qualcomm has significant ties with Chinese OEMs, the chip maker had no choice but to agree with China's decision. But Qualcomm has already paid a breakup fee in the deal and begun a $21 billion stock buyback program, they said, limiting its financial flexibility.

The deal, which was originally announced in 2016, was approved by eight other regulators around the world.

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

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