Qualcomm Inc., a U.S. headquartered semiconductor & telecom equipment firm, has apparently decided to refile an antitrust application with the Chinese regime for clearing one of its transactions. The deal in question is the USD 44 billion purchase of NXP Semiconductors N.V., a Netherlands based semiconductor manufacturer.
Ironically, on Saturday, the U.S. firm had actually withdrawn its application on the request of the Commerce Ministry of China, a few days before the deadline set by the Chinese administration to decide on the deal. As per reliable sources, the move is aimed at providing the country’s authorities with more time to take a decision on the purchase agreement, thereby avoiding a deal collapse.
Qualcomm claims that the acquisition of NXP will help the firm to expand its consumer base, thereby assisting it in becoming the leading semiconductor chip provider for the rapidly emerging automobile industry. Reportedly, the acquisition deal has received a green signal from eight of the nine global regulatory authorities excluding China.
The decision to refile the antitrust application with MOFCOM (Ministry of Commerce of People’s Republic of China) will grant another six-month span to the latter for reviewing the antitrust request. For the record, this is the second time that the U.S. chipmaker is refiling its application with the country’s administration for deal approval.
Analysts are of the view that the decision on the purchase agreement is not expected until both U.S. and China resolve their differences over mutual trade & other investment issues. Reliable sources claim that Qualcomm has provided numerous guarantees to MOFCOM to ensure it that NXP customers will not be required to buy the licenses of the U.S. firm.
Incidentally, Qualcomm, which had declared to purchase NXP semiconductors in the fourth quarter of 2016, stated in February that it will purchase the shares of NXP with USD 127.50 as a price for each share of the latter.