World's largest smartphone chip-maker rejected a suggestion by the White House that its collapsed $44 billion acquisition of Dutch peer NXP Semiconductors could be revived, saying the deal had been terminated as the deadline had expired.
Trump and Chinese President Xi Jinping met in Buenos Aires Saturday, and Trump told reporters that Xi said he would reconsider China's prior decision to withhold approval of the planned $44 billion merger between Qualcomm and NXP.
Since then, Qualcomm has paid a United States dollars 2 billion breakup fee to NXP for the failed deal and commenced a share repurchase program it had promised its shareholders, should the deal fall through. "Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap". However, the Chinese regulators insisted that antitrust issues remained, hence their refusal to give the green light - they denied the episode had anything to do with the trade war. During the months that followed it proved to be hard to get shareholder backing so Qualcomm was forced to increase their bid to $128 per share for NXP, for a total value of $44 billion pending regulatory approval. 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 U.S., in 5G.
Qualcomm had to pay NXP a $2 billion (approximately Rs. 14,100 crores) fee to terminate the deal. Now, chip companies may be more optimistic about their regulatory chances in China.
A representative for Xilinx declined to comment. The massive merger between Qualcomm and NXP have been approving in eight other jurisdictions. KLA-Tencor's CEO said on the company's last earnings call that he expects the deal to close by year end.
The deal which started in October 2016 fell apart in July 2018 when the government of China did not approve the merger.
U.S. lawmakers also passed reforms earlier this year that increased CFIUS' scrutiny of deals.