The relevant person in charge of Qualcomm said to the First Financial Reporter that this week is bound to be the finale. At 11:59 on the evening of the 25th, New York time, it is the contractual deadline for the acquisition, and it is also the time to trigger the $2 billion breakup. But now, Qualcomm has not received feedback from Chinese regulators.
'It is impossible to drag on, so it can't be explained to the shareholders, the cost is too high.' The person said, 'Generally, the company's external lawyers contact the General Administration, but there is no news yet.'
The relevant person in charge of the State Administration of Market Supervision of China also responded exclusively to the First Financial Reporter. It has not received any notice related to anti-monopoly. If there is relevant information, it will be released through the official website.
This protracted merger requires approval from nine major regulators around the world (US, EU, China, Korea, Japan, Russia, etc.). Currently, only Chinese antitrust agencies have not made a decision.
However, at the most anxious and sensitive time point of this merger, it has hit multiple games of escalating trade friction between China and the United States. Its future direction, whether successful or not, will have a profound impact on the global industry. At the same time. The EU antitrust regulator also stepped up its allegations against Qualcomm.
For Qualcomm, this strategy to acquire NXP's offer, in addition to the extraordinary standby, also triggered the chain effect of '螳螂 蝉, the oriole in the after'. Now, the merger finally ushered in the finale.
On July 19, local time, Qualcomm CEO Steve Mollenkopf said in an interview with the media that Qualcomm is still waiting for Chinese regulators to approve their acquisition of NXP Semiconductors, if on July 25 If the approval of the Chinese regulatory authorities is not available before the day, the transaction will be abandoned.
He said that if the acquisition of NXP fails, then Qualcomm will carry out a stock repurchase plan of 20 billion to 30 billion US dollars to boost the stock price. On July 20, Qualcomm extended its 30th offer to NXP, will take time Postponed until 5 pm, July 25, New York time.
'The transaction requires some financial operations, so the deadline for the offer and the deadline for the acquisition agreement will take a little time.' The Qualcomm-related person in charge explained to the First Financial Reporter.
Since November 6 last year, in just over four months, Qualcomm, the world's top three semiconductor companies, has experienced multiple hostile bids by the top ten Broadcom companies. The board of directors competes for the US Foreign Investment Committee. (CFIUS) involved in the postponement of the re-election of the board of directors, US President Trump forced the intervention to suspend the acquisition, from a fierce commercial war between US listed companies, directly to the national security field.
Interestingly, however, Qualcomm blocked the hostile takeover of Broadcom, and the other side is also resolutely acquiring NXP. In October 2016, Qualcomm originally expected to bring NXP to a record $38 billion, but in a year. After being overtaken by Broadcom's offer, the price also rose under the pressure of all parties, reaching $44 billion.
This M&A transaction has a high strategic significance and attractiveness to Qualcomm. It will not only enhance Qualcomm's leadership in 5G technology, but also promote Qualcomm's business diversification and reduce its reliance on smartphones to enter the automotive and security industries. Can strengthen its ability to resist hostile takeovers such as Broadcom.
Although the CEOs of the two companies are very close, CFIUS and Trump's repeated shots show that Trump finally stood on the Qualcomm side and blocked Broadcom. The reason is very simple: National security. When it is stopped, Broadcom The company is a Singapore-listed US-listed company, and neither Trump's speech nor the CFIUS document mentions China, but the subsequent public opinion field has almost attributed this block to the Chinese factor.
A common question is, if Trump can stop the 'combination of mergers' in the name of national security, why can't China stop the acquisition of NXP with Qualcomm, which has a huge impact on the industry, for similar reasons?
Qualcomm's acquisition of NXP needs to be approved by nine countries and regions around the world. Qualcomm said in January this year that South Korea and the European Union approved the transaction. This means that only the Chinese antitrust agency has not made a decision.
On March 26th, Qualcomm CEO Steve Morenkopf, who had just joined the US San Diego Annual General Meeting of Shareholders re-convened in accordance with the Trump Executive Order two days ago, has already appeared in the Qualcomm CEO Steve Morankopf, who was elected to the new board through shareholder votes. Beijing's China Development High-Level Forum was on the scene and asked questions from Chinese Premier Li Keqiang at a foreign forum.
On the same day, he mentioned in an interview with the media that Qualcomm’s acquisition of NXP is not only important for Qualcomm’s own development in the era of 5G and Internet of Things, but also for the empowerment of China’s mobile phone and even the greater Internet of Everything. .
In April of this year, after one year, the Ministry of Commerce of China disclosed for the first time the substantial progress of the centralized review of the merger of the mergers and acquisitions.
At that time, the spokesman of the Ministry of Commerce spoke to the First Financial News reporter that the Ministry of Commerce is reviewing the acquisition of NXP Semiconductors in accordance with the relevant provisions of the Anti-Monopoly Law. As the transaction will be in the industry. The far-reaching impact may be unfavorable for market competition. The investigating agency needs to spend a lot of time investigating forensics and analysis, and has already raised competitive attention with Qualcomm on this transaction, and negotiated with Qualcomm on how to eliminate the adverse effects of the transaction.
Gao Feng said that for the remedy plan that Qualcomm has already proposed, the preliminary test of the market test conducted by the investigation authority concluded that Qualcomm's solution is difficult to solve the relevant market competition. On April 16, Qualcomm applied for withdrawal of the declaration and has re-declared.
China's latest "Organizational Reform Plan of the State Council" will be dispersed in the Ministry of Commerce, the National Development and Reform Commission, and the Anti-monopoly Law Enforcement Agency of the State Administration for Industry and Commerce for the past years, and will be unified in the State Administration of Market Supervision. In the first half of May, the Anti-Monopoly Bureau of the Ministry of Commerce of China It was also formally incorporated into the newly established State Market Supervisory Administration. The First Financial Journal reporter learned from multiple authoritative sources that the original team of the Ministry of Commerce is still responsible for the progress of the case.
Full of multiple uncertainties
Many people in the industry expect that the adoption of the merger will not be easy, regardless of the current environment, considering the current financial situation.
'In this uncertain era, no one can say what the next step is.' A person close to the Sino-US bilateral negotiations once sighed to the First Financial reporter.
At the same time, the impact of the transaction on China and the global market does require careful evaluation. The adoption of Qualcomm's NXP in the EU is also the result of a series of commitments and concessions from Qualcomm. A former senior at NXP's Dutch headquarters. People reminded the first financial reporter that if Qualcomm acquired NXP to be released, a giant company was born, and its driving force to reduce costs will inevitably generate higher bargaining power for upstream and downstream enterprises.
Qualcomm's series of commitments became a positive factor in the EU's anti-monopoly investigation. First, Qualcomm promised to continue to provide NXP's MIFARE technology and trademark licenses for the next 8 years. The license terms will at least not be worse than the current ones. MIFARE is a Technology used in ticketing or toll platforms. Qualcomm will guarantee the same level of interoperability for its chips and other companies' products in the next 8 years. Qualcomm will not acquire NXP's NFC standard essential patents and some NFC non-standards. Essential patents. These patents will be transferred to third parties, which will guarantee to provide Qualcomm with a royalty-free global patent license for the next three years. For Qualcomm's NXP non-standard essential patents, Qualcomm will not use this for other companies. Initiating a patent litigation will provide authorization in the form of a royalty-free fee.
In response to the above commitments made by Qualcomm, the European Commission said in the statement: 'We finally came to the conclusion that after Qualcomm made corresponding commitments, the deal no longer has competition concerns. However, the decision is conditional. Qualcomm must abide by all commitments. '
On July 19, local time, the EU Justice Department stated that it had sent another list of allegations to Qualcomm. Such documents usually take the preliminary conclusions of the regulatory body and explain the company's questions about the initial list of allegations. The European Commission said: 'The additional statement of opposition issued today focuses on certain elements of the price-cost test adopted by the European Commission to assess the extent to which Qualcomm sells UMTS baseband chipsets at below cost. In violation of EU antitrust rules, Qualcomm may face a fine of up to 10% of global turnover.