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Qualcomm says NXP deal is dead

05 December 2018
Qualcomm says NXP deal is dead

Chinese President Xi Jinping indicated he's open to approving a renewed deal for Qualcomm to buy chip rival NXP in trade talks with President Donald Trump on Saturday evening, according to a statement issued by the White House.

US chipmaker Qualcomm Inc. has ruled out any possibility of a renewed bid for rival NXP Semiconductors after President Xi reopened the doors for a new bid during his meeting with President Trump over the weekend.

A Qualcomm spokesman said that the business will not pursue its previous agreement to agree NXP. The email declared that though the company is grateful for the reconsideration and the comments, the deadline for the transaction has expired and hence the contemplated deal has been terminated.

"Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G road map", it added.

Chinese regulators did not have immediate comment.

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

Qualcomm said Monday the clock ran out on the merger, and it is ready to move on. Qualcomm even paid a $2 billion penalty in July for breaking off the merger. Qualcomm has a large presence in China so they were not left with any real options except to cancel the deal. Now, chip companies may be more optimistic about their regulatory chances in China.

A more near-term test being watched by dealmakers is KLA-Tencor Corp pending acquisition of fellow semiconductor equipment maker, Israel's Orbotech Ltd. Last month, China approved United Technologies Corp's $30 billion purchase of aircraft parts maker Rockwell Collins Inc and Walt Disney Co's $71.3 billion (around Rs. 5.02 lakh crores) deal to buy most of Twenty-First Century Fox's entertainment assets.

In July, Qualcomm scrapped plans for a $44bn (£34bn) takeover of NXP after Chinese regulators signalled that they would block the takeover.

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

U.S. lawmakers also passed reforms earlier this year that increased CFIUS' scrutiny of deals.