Can ZTE lift the ban on the approval of Qualcomm NXP trading?
In October 2016, Qualcomm announced the acquisition of Dutch semiconductor giant NXP for $110 per share. In February 2017, in response to a malicious acquisition by Broadcom, Qualcomm raised its offer for NXP, from $110 per share. To $127.50 per share, the overall quotation increased from $38 billion to $43 billion.
Qualcomm hopes to further diversify its business through the acquisition of NXP, and realize its layout in the future of IoT, car networking and other emerging businesses.
NXP is a leader in automotive electronics. Brian Modoff, executive vice president of Qualcomm's strategy and M&A business, said in an interview at US headquarters today that Qualcomm and NXP are complementary in terms of IoT (Internet of Things) capabilities. Its leading position in the Internet of Vehicles will also drive Qualcomm's business expansion in the Internet of Things.
In 2017, Qualcomm's IoT business revenue exceeded $1 billion. Currently, Qualcomm has shipped more than 1 million IoT chips per day.
The mergers and acquisitions between Qualcomm and NXP were only approved by Chinese regulators at the global regulatory level. At one time, there was a dawn, but then the Sino-US trade became increasingly tense, and ZTE encountered a US ban, and the prospects gradually dimmed. In the industry's view, China has used Qualcomm's and NXP's transactions as a bargaining chip against Sino-US trade wars and ZTE events.
Brian Modoff hopes that the issue of Sino-US trade friction can be resolved as soon as possible. He also said that China is the focus of Qualcomm's business development and cooperation. Qualcomm's commitment to China is also unwavering. It also hopes that Chinese regulators can approve Qualcomm as soon as possible. The acquisition of NXP.
For this acquisition, in addition to the regulatory level, Qualcomm also needs to acquire 70% of the stocks that NXP is out of. At present, the stocks that NXP has in circulation are only about 5%, and there is still a considerable distance from 70%. In this regard, Brian Modoff said that NXP's current share price is $107, compared to the $127.5 quotation offered by Qualcomm at the time. Shareholders should be happy to sell their shares. However, because China's approval results are not fixed, many shareholders are on the sidelines.
If approved by the regulator, Brian Modoff said that he could complete the acquisition target for the acquisition of NXP's outstanding shares.