For Qualcomm, Xi’s Comments on NXP Deal Are Too Little, Too Late
Wireless giant Qualcomm spent a bruising two years pursuing NXP Semiconductors NV, the Dutch firm that could have accelerated its entrée into new areas like automotive chips.
Qualcomm, caught up in rising U.S.-China trade tensions, ended the bid in July after Chinese regulators allowed Qualcomm’s self-imposed deal deadline to pass. But at a dinner Saturday in Buenos Aires, Chinese President Xi Jinping said he would be “open” to approving the NXP deal were Qualcomm to pursue the company once more, according to a statement from White House press secretary Sarah Sanders.
Asked to respond to the comment, a Qualcomm spokesperson said Monday that the company won’t change course in response to Xi’s newfound interest in the deal’s success.
“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,” the spokesperson said in an email. “Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap.”
The failure cost Qualcomm a $2 billion break-up fee in addition to the expenses of pursuing the acquisition. Chinese regulators’ decision to allow the deal to fall apart—who, after eight other countries’ regulators OK’d the proposal, were the last obstacle to the agreement—was seen as inextricably tied to President Donald Trump’s aggressive stance toward China on trade.
After the deal fell apart, Qualcomm said it would use $30 billion previously earmarked for the acquisition to buy back stock.