On April 20th, Microelectronics reported that Qualcomm today announced that it will negotiate with NXP to close the deadline for mergers and acquisitions between April 25th, due to the delay in acquiring NXP (NXP) from the approval of the Chinese Ministry of Commerce. Postponed to July 25. If there is still no approval at that time, then according to the agreement, this 18-month acquisition will end in failure, and Qualcomm will pay NXP 2 billion US dollars for the 'break up fee'.
In October 2016, Qualcomm announced the acquisition of NXP Semiconductors, a Dutch semiconductor giant, for US$110 per share in cash. Taking into account debt and other factors, Qualcomm had to pay a total of US$47 billion. Qualcomm hopes to realize its Internet of Things in the future through this acquisition. Network layout such as car networking, and NXP is in the leading position in this field.
The acquisition of Qualcomm on the one hand needs to persuade 70% of NXP shareholders to approve the transaction, while at the same time it needs to pass global anti-monopoly review by regulators in 9 countries and regions, including China.
At present, only the approval of the Chinese government is worldwide, and as of today, Qualcomm has convinced NXP shareholders that the transaction is still unknown. During the period of experience with Broadcom's hostile acquisition storm, Qualcomm raised the price of NXP to 127.5 per share. The U.S. dollar, and therefore has gained support from some NXP shareholders, when Qualcomm stated that it had reached a binding agreement with about 28% of NXP shareholders.
Previously, Qualcomm had submitted applications three times because of delays in the release of the Ministry of Commerce of the People's Republic of China. The deadline for the most recent approval was April 17. Due to concerns that the Ministry of Commerce rejected the transaction, Qualcomm withdrew its previous applications on the 16th. Resubmit, intended to win more mediation time.
At the time when Qualcomm resubmitted its application, the U.S. government announced its export sanctions for ZTE products. Qualcomm and ZTE have become the chips for the game between China and the United States.
Qualcomm had previously postponed NXP’s transaction deadline, but this announcement by Qualcomm means that the deadline for the final transaction deadline will be reached. If China’s Ministry of Commerce still does not release, Qualcomm will pay NXP 2 billion US dollars in accordance with the agreement. Cancellation fee.
During this three-month period, if China’s Ministry of Commerce approves Qualcomm’s NXP deal and the US’s ZTE’s ZTE, this is the best ending. Otherwise, Qualcomm has only lost part of its funds and its strategic readjustment, and will not hurt Bone, but ZTE is facing the 'shock' of core business, the risk of survival.
Today, ZTE held an emergency press conference to express that the U.S. government’s approach is extremely unfair to ZTE. It will not only seriously endanger the survival of ZTE, but also hurt the interests of all ZTE’s partners, including a large number of U.S. companies, through all laws. Allowed means to safeguard their own legitimate rights and interests,
Today, the U.S. Department of Commerce responded that there is no room for negotiation on ZTE's sanctions. It seems that the issue has been settled. For some time in the future, Qualcomm and ZTE will focus on the Sino-U.S. trade, and the key to solving the problem will be. It is because China and the United States came to the negotiation table.