Briefing: Xi may consider Qualcomm-NXP deal again, White House says

Gladys Abbott
December 5, 2018

The White House said that China was "open to approving the previously unapproved" deal for Qualcomm to acquire NXP "should it again be presented".

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.

Buying NXP, which specialises in computer chips for carmakers, would enable Qualcomm to diversify growth engines at a time of weak demand for smartphones and lacklustre results, said C.Y. Yao, a Taipei-based senior analyst with research agency TrendForce.

But in a media statement, Qualcomm said the deadline for the planned transaction has expired, and the company now "considers the matter closed", with no intention of reviving talks. The perception was that Broadcom is more concerned with acquisitions than R&D, and any let up could allow Huawei to leapfrog Qualcomm, and thereby the United States, in 5G.

Chinese regulators did not have immediate comment.

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

According to Reuters, people close to the two companies have revealed that they did not lobby the USA government to bring up the aborted merger during the negotiations, and were surprised to see it resurface as an issue.

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After the meeting, Trump said they had reached an "incredible deal".

Qualcomm moved ahead with a stock buyback of about $30 billion that it had promised shareholders should the NXP deal fall apart.

A Qualcomm representative didn't immediately respond to a request for comment.

Competition regulators in eight countries had approved the takeover.

Qualcomm, the world's biggest smartphone-chip maker, walked away in July from the mammoth deal to buy NXP after failing to secure Chinese regulatory approval, becoming a high-profile victim of the China-US trade dispute.

Since then, Qualcomm has paid the $2 billion breakup fee owed to NXP and embarked on an accelerated share repurchase program.

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