Economy

Qualcomm: $44B NXP acquisition is dead

Qualcomm: $44B NXP acquisition is dead”

Recently the White House released a statement that declared that China is interested in approving a previous deal that was forwarded by U.S. Chip manufacturer Qualcomm to buy its Dutch counterpart NXP Semiconductors.

This weekend, United States president Donald Trump met with his Chinese counterpart Xi Jinping in Argentina.

Recently U.S. President Donald Trump and Chinese President Xi Jinping agreed on a 90-day truce on additional tariffs as both sides are looking to de-escalate tensions in a trade war that is proving damaging to both.

Steve Mollenkopf, CEO, Qualcomm, was quoted by sources to say that the failure of the deal was a side effect of the mounting tensions due to trade imbalance between the USA and China.

"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", a Qualcomm representative told Reuters via email.

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.

China's foreign ministry declined to comment on Qualcomm during a regular media briefing on Monday. It spent $22.6 billion on buying its own stock in the 12-months ended September, using up cash reserves that had been intended for the NXP acquisition.

When some deals collapse, they can't be revived - even by the most powerful politicians in the world.

"If that deal came back to him, he would most likely approve it quickly", Trump said.

Regulators in eight countries approved the deal, including in the US and Europe. Most big smartphone markets like the US, China, and India are nearly fully saturated and the world number one chip maker will be forced to look into new avenues for the coming decade.

Qualcomm has stated publicly that they have moved on from the deal and already paid NXP the $2 billion cancellation fee from their original agreement.

Acquisitions of USA companies by Chinese companies, on the other hand, have been few and far between in the previous year, after the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinizes deals for potential national security risks, shot down more of these deals, such as Ant Financial's plan to acquire U.S. money transfer company MoneyGram International.



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