Trump says China is now open to Qualcomm-NXP deal

Qualcomm walked away in July from the mammoth deal to buy NXP after failing to secure Chinese regulatory approval. — AFP pic

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

Had it have gone through, it would have been the biggest semiconductor deal globally and its collapse helped exacerbate growing trade tensions 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 spokesperson said in a statement on Monday.

In addition, Qualcomm has already moved ahead with a $30 billion stock buyback in the wake of the original acquisition failure, with $21 billion already spent, "making it significantly more hard to re-engage on a deal", said Rasgon.

The acquisition deal between Qualcomm and NXP, worth $ 44 billion, ceased earlier this year because China did not grant timely approval.

Qualcomm shares closed up 1.5 percent at $59.14 (about Rs. 4,200) in NY on Monday, while NXP shares ended up 2.75 percent at $85.67 (around Rs. 6,000).

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Qualcomm first offered to buy NXP, which is based in the Netherlands, for about $38 billion in October 2016.

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. "If at the end of this period of time (90 days), the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%", the statement said. Qualcomm even paid a $2 billion penalty in July for breaking off the merger. Mellanox did not immediately respond to requests for comment. NXP has also announced its own $5 billion (around Rs. 35,200 crores) share buyback program.

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.

Regulators in eight countries approved the deal, including in the US and Europe.

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