Qualcomm secures approval from 8 of the 9 regulatory bodies as it looks to acquire NXP
Tech giant Qualcomm is poised to acquire Dutch automation firm NXP for $47 billion, as regulators in Korea and the EU approve the proposed deal. With the European Commission and the Korean Fair Trade Commission authorising the deal, Qualcomm has now received 8 of the 9 approvals required from regulators around the world. Only China remains as a potential stumbling block.
“We are pleased that both the European Commission and the Korean Fair Trade Commission have granted authorisation of the NXP acquisition, and we are optimistic that China will expeditiously grant its clearance,” said Steve Mollenkopf, chief executive officer, Qualcomm Incorporated.
The deal would see Qualcomm pay around $110 per share to acquire NXP. The acquisition would allow Qualcomm to sharpen its focus on automation and payment services within the sector.
“Acquiring NXP is complementary to Qualcomm’s global portfolio, providing tremendous scale in automotive, IoT, security and networking and will greatly accelerate our ability to execute and create value in new and adjacent opportunities,” he added.
During the authorisation process, EU officials voiced concern that the takeover could lead to price hikes and a reduction of choice in the semiconductor subsector. To allay these fears, Qualcomm has agreed not to buy NXP’s standard essential patents for contactless payments. It has also agreed to fix prices for the licences for NXP’s fare collection technology for 8 years at their current levels.
The acquisition could also help Qualcomm fend off an unsolicited takeover bid of their own, from rival Broadcom. Qualcomm is attempting to resist a $70 per share takeover bid from Broadcom – a deal that would likely face far higher scrutiny from regulatory bodies if Qualcomm had already acquired NXP.
On Tuesday, Qualcomm wrote to its shareholders, calling Broadcom’s $70 offer "an opportunistic, inferior price".
"The Qualcomm Board strongly objects to Broadcom’s aggressive tactics and urges [shareholders] to reject its solicitation efforts by voting FOR the re-election of Qualcomm’s highly qualified slate of directors," the statement read.