China Restarts Qualcomm-NXP Merger Review, Optimism Grows

Shares of Qualcomm and NXP grew by some 1.5 and 11.7 points throughout Monday as China’s Ministry of Commerce restarted its review of their proposed merger, with investors becoming optimistic after reports emerged that Beijing instructed its regulators to speed up the lengthy antitrust probe which originally started in late 2016. If approved, the $44 billion consolidation would mark Qualcomm's largest acquisition ever and allow the company to diversify beyond smartphones, thus making its operations less reliant on the mobile market where it's currently lowering its patent licensing rates so as to attempt repairing relations with major clients like Apple that find them unfair.

Qualcomm resubmitted its merger notice in China last month and moved the deadline for the completion of the deal by three months, with the new date now being July 25. Antitrust regulators in the Far Eastern country are said to have previously asked for significant protections for local companies before approving the consolidation, with some industry watchers speculating the prolonged nature of the review was a direct result of the growing trade-related tensions between Washington and Beijing. U.S. President Donald Trump's decision to block Broadcom's attempted acquisition of Qualcomm is also said to have been seen unfavorably in China as the tie-up might have allowed Shenzhen-based Huawei to overtake the American chipmaker in certain technology segments due to Broadcom's track record with cutting R&D funds of its takeover targets shortly after absorbing them.

Relations between the world's two largest economies are now apparently improving, not only because of China's newfound commitment to complete the Qualcomm-NXP deal review but also due to President Trump's recent vow to help ZTE return to normal operations after being hit with a crippling trade ban issued by the Commerce Department. The two superpowers are set to hold trade talks in Washington over the course of this week. As was the case with other antitrust bodies that previously reviewed the proposal, China has jurisdiction over the matter as the Dutch NXP and Qualcomm both already have a massive commercial presence within its borders.

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