Qualcomm says NXP deal is off

Qualcomm says NXP deal is off

Trump and Chinese President Xi Jinping met in Buenos Aires Saturday, and Trump told reporters that Xi said he would reconsider China's prior decision to withhold approval of the planned $44 billion merger between Qualcomm and NXP. With NXP being the biggest supplier to the industry, Qualcomm could be forced to reopen the deal amidst a grim outlook for the mobile chip industry in the coming months.

Since then, Qualcomm has paid a Dollars 2 billion breakup fee to NXP for the failed deal and commenced a share repurchase program it had promised its shareholders, should the deal fall through. Qualcomm was given just an hour's notice by the Trump administration about Xi's comment on the NXP deal, and its inclusion in the White House statement, according to two of the sources. "Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap". Chinese regulators declined to clear the deal, though the country later expressed regret over the transaction's collapse.

Qualcomm walked away in July from the proposed acquisition of NXP after failing to secure Chinese regulatory approval, becoming one of the most high-profile victims of the escalating US-China trade war at the time.

After the meeting, Trump said they had reached an "incredible deal".

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A Qualcomm representative didn't immediately respond to a request for comment.

According to reliable sources, Qualcomm has already paid a $2 billion to NXP as a fee to terminate the deal and has launched a stock repurchase program worth $30 billion.

A more near-term test being watched by dealmakers is KLA-Tencor Corp pending acquisition of fellow semiconductor equipment maker, Israel's Orbotech Ltd.

The deal, which was originally announced in 2016, was approved by eight other regulators around the world. According to Bloomberg, China's Ministry of Commerce was concerned about Qualcomm's plans for patent licensing - but it is commonly supposed that the USA's threatened trade war with the country, in part down to a sales ban on ZTE products in the United States, was a major factor.