Qualcomm Extends NXP Bid Yet Again Amid Scrutiny From China

Qualcomm on Friday announced yet another extension of its offer to purchase Dutch NXP Semiconductors for $38 billion as the company is still waiting for final approval of the deal from China. The new deadline has been pushed to February 23, though its short delay doesn't necessarily signal Qualcomm is expecting China's antitrust watchdog to greenlight the proposal in a matter of two weeks, as evidenced by numerous similar changes to the planned roadmap for the completion of the merger announced in recent times. The firm is also under pressure from Broadcom that's presently trying to purchase it as part of a hostile takeover, having recently launched its second, supposedly "final" offer for the chipmaker amounting to $121 billion, increasing its original bid by 24-percent. Qualcomm already rejected the second approach but wasn't as dismissive of the possibility of a tie-up as it initially was, having proposed to meet with Broadcom and discuss more favorable consolidation terms.

Some industry watchers believe Qualcomm's inability to close the NXP deal in a timely manner is what prompted Broadcom to make a move for the San Diego, California-based tech giant in the first place, speculating that it sensed corporate weakness. The next several weeks are likely to be crucial for Qualcomm's future as they should not only decide the outcome of its proposal to acquire NXP but the fate of the company as a whole, with its annual shareholder meeting scheduled for March 6 being expected to host an attempted coup of its board of directors which Broadcom is still trying to replace with its own candidates who are prepared to sell off the technology juggernaut without any further discussions. Qualcomm is still urging its shareholders to re-elect its board members but it's currently unclear whether the company managed to start additional talks with Broadcom whose M&A history doesn't suggest a third offer for the semiconductor manufacturer is a realistic possibility.

The NXP deal has last been approved by competent authorities in the European Union and South Korea, whereas China's regulators haven't commented on the status of their probe and it's presently unknown what's making them reluctant to conclude it, especially in light of a wide range of concessions Qualcomm already agreed to with other agencies around the world to accelerate the deal. Broadcom's offer for Qualcomm stands irrespective of the outcome of its NXP bid, suggesting the suitor is either extremely confident the deal will go through or believes it's underpaying for Qualcomm by at least $38 billion.

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