US-China trade war
SAN FRANCISCO, July 26: In a big fallout of the escalating US-China trade tensions, San Diego-based chipmaker Qualcomm on Thursday officially terminated its 44 billion dollar acquisition of Dutch tech firm NXP Semiconductors after the Chinese regulators let the final deadline pass and did not grant approval to the deal.
Paving the way for a 30 billion dollar stock buyback, the company also announced to pay a termination fee of 2 billion dollars to NXP Semiconductors that makes automotive, security and Internet of Things (IoT) solutions.
“Our core strategy of driving Qualcomm technologies into higher growth industries remains unchanged.
“We will continue to focus on our strong momentum in new growth industries with projected revenues of approximately 5 billion dollars for fiscal year 2018, up greater than 70 per cent from fiscal year 2016,” Steve Mollenkopf, CEO of Qualcomm, said in a statement on Thursday.
The two companies entered into one of the largest tech deals in October 2016 and the deadline to close the deal was extended several times as they waited for China to approve or deny the merger.
Eight of the nine countries where Qualcomm has businesses had approved the deal. In an earlier statement on Wednesday, Mollenkopf said, “We intend to terminate our purchase agreement to acquire NXP when the agreement expires at the end of the day today, pending any new material developments”.
With no answer from China’s Ministry of Commerce as the deadline passed on Thursday morning, it was clear that the merger was officially dead.
Qualcomm, however, said it continues to achieve strong growth, accelerated by its expansion and momentum in the areas of IoT, automotive, RF Front End (RFFE), compute and networking. (IANS)