Qualcomm’s plans to acquire NXP goes for a toss, as China refuses to give the nod.
Qualcomm Inc., an American multinational semiconductor and telecommunications equipment maker, had been pursuing the deal for almost two years. While eight global jurisdictions had given the go-ahead, China’s refusal to the deal squashes Qualcomm’s dream to buy NXP - another global semiconductor manufacturer. Qualcomm's CEO Steve Mollenkopf had mentioned in Wednesday’s earnings call that if China did not approve, the company would walk away from the NXP deal.
Qualcomm’s last bid for NXP was $44 billion. With the deal falling through, Qualcomm is now left with paying a $2 billion breakup-fee to NXP. It also plans to buyback up to $30 billion worth of shares as promised to shareholders in the event of the deal’s demise.
NXP announced that it’ll repurchase $5 billion of shares.
While many people seem to be blaming the U.S.-China trade tensions as a major factor behind China’s rejection of the deal, the nation’s Commerce Ministry spokesman Gao Feng mentioned, "This case is about the enforcement of antitrust laws. It has nothing to do with China-US trade," according to Chinese state media.