Qualcomm to refile NXP takeover application with Chinese authorities: report

The deal has become complicated due to political struggles between the US and China.
Written by Charlie Osborne, Contributing Writer

Qualcomm will refile an application with the Chinese government to approve the acquisition of NXP Semiconductors.

The proposed deal, in which Qualcomm will pay roughly $44 billion, has become complicated due to political issues between China and the United States, both of which are embroiled in a fight over trade deals and tariffs.

According to Reuters, the US chipmaker may file a new application as early as Monday, following the withdrawal of an earlier antitrust application on Saturday.

China's commercial regulators, the Chinese Ministry of Commerce (Mofcom), originally held a deadline of April 17 to decide whether or not to approve the acquisition.

However, by withdrawing and refiling, the news agency's sources suggest that regulators will be given up to six more months to make a decision and this will potentially prevent the deal from collapsing outright.

Qualcomm has been attempting to acquire NXP since 2016. The company originally offered $110 per share, later ramped up to $127.50 per share to sweeten the deal for NXP shareholders.

The increased offer was made at the time of Broadcom's hostile takeover attempt, a move which ended in failure after US President Trump stepped in to prevent the acquisition from taking place.

At the time, the Trump Administration cited national security concerns and the possibility of Chinese companies eventually coming to dominate next-generation technologies and research.

Broadcom, once co-headquartered in Singapore and California, has now redomiciled to the United States.

The expiration date of Qualcomm's NXP offer has been pushed back time and time again. While a potential transaction has gained the approval of eight out of nine global regulatory bodies, China is holding out on the decision.

Trump's Qualcomm-Broadcom blockade highlighted tensions between the US and China, of which both parties are currently fighting a political battle over trade deals.

Earlier this month, Trump asked his administration to consider up to $100 billion in new tariffs on Chinese goods, an increased $50 billion in tariffs already proposed for Chinese products.

Steel and aluminum tariffs have already been imposed, and the new tariffs could impact industries including technology, healthcare, and transport.

In retaliation, China says it will impose tariffs of up to $50 billion on US imports, including foodstuffs, aircraft, and other vehicles.

Mofcom spokesman Gao Feng told Bloomberg that any additional tariffs would result in China retaliating "immediately, intensively, without any hesitation."

See also: Broadcom-Qualcomm went from bad to worse to Trump: The whole sordid saga

Analysts suggest that until these trade deals and tariff issues are dealt with, a decision on Qualcomm's proposed NXP acquisition is unlikely.

Andrew Gilholm, director of analysis for China and North Asia at risk consultancy Control Risks, told Reuters that China is not blocking the deal, but is "holding it hostage."

The potential acquisition has been drawn out and fraught with issues ranging from price to politics, but should Qualcomm secure NXP, the company will gain a fresh portfolio and talent in the automotive, security and Internet of Things (IoT) industries.

Qualcomm says that the deal will also help the company "accelerate its growth strategy."

ZDNet has reached out to Qualcomm and will update if we hear back.

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