This means that after 21 months, the amount of up to 44 billion US dollars, the semiconductor industry's largest merger to date has failed. Qualcomm announced this result.
Trade wars, the US side continues to increase the number of transactions leading to abortion
According to the previous agreement between Qualcomm and NXP, the deadline is 11:59 noon on July 26th, Beijing time. If the result of the approval of the Chinese regulatory authorities is not obtained before, the transaction will be terminated. Qualcomm needs 9 after that. Within the hour, pay NXP a $2 billion cancellation fee.
In October 2016, Qualcomm announced that it had acquired NXP for US$38 billion, or about US$110 per share. During February, Qualcomm raised its offer for NXP to US$127 per share, totaling RMB44 billion. Dollar.
Qualcomm's acquisition of NXP's transaction is currently the largest acquisition in the semiconductor industry. NXP is seen as an important jigsaw to build a future Qualcomm empire. If successful, the combined Qualcomm will become the world's third largest semiconductor manufacturer after Samsung and Intel. .
NXP's deep accumulation in automotive electronics, microcontrollers, sensors, RF, power supplies, etc., a wide range of product lines and intellectual property will support Qualcomm's strategic layout in the field of Internet of Things, Internet of Things, etc., while reducing its business in the smartphone business. Dependence and potential risks.
The completion of this transaction requires the permission of nine antitrust agencies around the world including China. In the past year or more, Qualcomm has been waiting for the final market area - China's approval results.
From a procedural point of view, the review period of China's anti-monopoly agencies is 6 months (180 days), but for the Qualcomm NXP transaction, according to the micro-network, since Qualcomm applied to the Chinese Ministry of Commerce in April last year, Three times to re-report the material, the merger has also become the first case in which Chinese anti-monopoly agencies have used two 180-day deadlines for review.
The transaction was once in the process of waiting for the results of the approval of Chinese regulators. Qualcomm has repeatedly expressed optimism, but the Sino-US trade war and the ZTE incident provoked by the US have cast a shadow over the results. The analysis said that China will review the transaction as a counter-product of the United States.
In the past month, foreign media reported that Chinese regulators have removed barriers at the regulatory level, but believe that the recent increase in US tariff policy on China has finally led to the abortion of this transaction.
Urgent need to return to the growth track Qualcomm's 'B plan'
For Qualcomm, it would be a shame to miss NXP, the most quality piece of 'target' in recent years. This will slow down the transition process of Qualcomm to a certain extent. But Qualcomm believes that although it failed to finalize the acquisition, In terms of technological advantages in innovation and a clear strategic plan for the future, Qualcomm's transformation will still be successful.
At the moment, Qualcomm is expanding its diversified business landscape in addition to 5G, AI and other business related to smartphone business, in mobile computing (XR, mobile PC), Internet of Things (Consumer Internet of Things, Industrial Internet of Things), automatic Active business areas such as driving are actively deployed.
In fiscal 2017, Qualcomm's revenue was $16.5 billion. Of this, $3 billion came from a business unit other than mobile, accounting for only 18% of total business. However, non-mobile business revenue grew rapidly, and 2017 data increased 25% from 2016. , a 75% increase from 2015. Qualcomm hopes that the future mobile and non-mobile businesses will each achieve half of revenue.
After the acquisition failed, Qualcomm will invest 30 billion US dollars to buy back shares to raise the stock price. After the unsuccessful acquisition of Broadcom and the acquisition of NXP, Qualcomm needs to boost the confidence of shareholders. At the same time, it does not rule out that Qualcomm will continue to look for quality in the future. The possibility of the acquisition of the target.
Qualcomm's third-quarter earnings report for the fiscal year 2018 shows that Qualcomm's third-quarter net profit was $1.2 billion, up 41% from $900 million in the same period last year; revenue was $5.6 billion, compared with $5.4 billion in the same period last year. Increase by 4%.
Among them, Qualcomm CDMA Technology Group (QCT) third-quarter revenue was $4.087 billion, up 1% from $4.052 billion in the same period last year, and up 5% from $3.897 billion in the previous quarter. Qualcomm Technology Authorized Group (QTL) third-quarter revenue was $1.465 billion, up 25% from $1.172 billion in the same period last year, and up 16% from $1.26 billion in the previous quarter.
Qualcomm needs to honor its performance commitments to shareholders. Previously, Qualcomm had said that if Broadcom's acquisition was unsuccessful, its revenue in FY 2019 would increase by 60% and its profit would increase by 100%.
At present, Qualcomm is responding to investigations by anti-monopoly agencies including South Korea and the European Union, and is also involved in litigation with Apple, an important customer. In today's earnings conference call, Qualcomm has said that this year's new iPhone products, Apple will Only Intel's baseband chip is used, which means that Qualcomm has almost lost Apple as an important customer.
In addition, Qualcomm is still implementing a $1 billion cost reduction plan. In the future, Qualcomm will still face challenges from many aspects.
During the 21-month period, both Qualcomm and NXP have affected potential business opportunities to varying degrees due to long waits, many businesses have been stagnant, and challenges from competitors. The termination of the transaction will make both sides more Focus on the expansion of future business.
Especially for Qualcomm, it needs to return to the growth track and reshape the confidence of Qualcomm.