The road to acquisition
At the earnings meeting held on the day of the announcement, analysts asked why Qualcomm CEO Steve Mollenkopf said that Qualcomm needs to provide new opportunities in addition to mergers and acquisitions when it does not continue to extend the offer to regulators for more approval time. Sex, not only to determine the sex of investors and partners, but also to give our employees certainty.
In fact, this is probably the biggest acquisition in the history of global chips. It is indeed a tug-of-war. In October 2016, Qualcomm announced that it would acquire NXP Semiconductors, the world's largest car chip supplier, for about $38 billion. The acquisition is completed, which will become the largest M&A case in the history of the chip, refreshing the record of Anwar's $37 billion acquisition of Broadcom in May 2015. Subsequently, in order to block Broadcom's acquisition, and in terms of business model, considering that NXP is its The key to the future application of the layout, Qualcomm adjusted the offer, the total estimate reached $ 44 billion.
So what is the biggest bottleneck of Qualcomm’s acquisition of NXP? In fact, it is the anti-monopoly investigation of various countries. As of July 25, Qualcomm’s acquisition has only received the United States, the European Union, Japan, Russia, South Korea, etc. The approval of the eight national and regional regulatory authorities has not been approved by all major regulatory authorities worldwide.
In fact, in order to reassure national regulators, Qualcomm has done a lot of articles, such as committing to continue to license NXP's MIFARE technology in the next 8 years, and the licensing standards remain unchanged. Abandoning the acquisition of NXP NFC standard essential patents and some non-standards The necessary patents, these patents will be transferred to third parties, and for NXP's non-essential patents obtained by Qualcomm, willing to provide authorization free of charge, a series of sincere adjustments to impress many regulatory authorities and release.
Steve Mollenkopf concluded that after the termination of the agreement, we intend to implement a stock repurchase program of up to $30 billion, bringing great value to our shareholders, to achieve peace of mind.
What is the situation?
Due to the trade impasse between China and the United States, and conflicts over issues such as technology and patent ownership, the deal was intricate from the start.
An industry analyst who did not want to be named told the "Communication Industry News" (network) reporter that the reason for the failure of the acquisition was that the release of the acquisition would directly threaten China's current major autonomous driving programs and the core technology of electronic trading. NXP's own digital and analog signal solutions are extremely complete. If Qualcomm's advantages in RF technology are added, it may produce a market-level company that is second only to Intel, a monopoly in various semiconductor applications, and is currently developing in China. Various semiconductor industries have direct threats.
In addition, in addition to the failure of the acquisition announcement, Qualcomm did not bring good news in other businesses. At the analyst conference call after the quarterly earnings report, Qualcomm chief financial officer George Davis said that the company can definitely predict Apple will abandon Qualcomm at the next product launch and switch to 'competitor's modem'. However, this does not seem to affect Qualcomm's business. Qualcomm's third-quarter earnings report for the fiscal year ending June 20, 2018 shows that Qualcomm's third-quarter revenue was $5.6 billion, up 4% from $5.4 billion in the same period last year; net profit was $1.219 billion, a 41% increase from the previous year's net profit of $866 million.
So, how will Qualcomm, which announced the failure of the acquisition, break in the new car networking field?
From the situation on MWC 2018, Qualcomm will continue to deepen cooperation with other partners, hoping to achieve the effect of the alternative acquisition of NXP, such as auto-driving may cooperate with Google and other car manufacturers, but also with Microsoft, Amazon, etc. Manufacturers promote smart home solutions. And Baidu, Alibaba's smart city cooperation will continue, and promote to the 5G era. Although it will go around and can not completely replace the value of NXP, but still ensure the continuity of Qualcomm's future growing up.