United States Treasury Secretary Steven Mnuchin is “very disappointed” China didn’t approve Qualcomm’s proposal to acquire NXP Semiconductors as part of a $44 billion deal after all other competition regulators in the world already did so, the official told CNBC on Thursday. “We’re just looking for U.S. companies to be treated fairly,” the former investment banker said, pointing to the development as yet another example of China blocking an expansion of a U.S. company that has already been greenlit in multiple other jurisdictions.
Qualcomm confirmed it’s giving up on the idea of acquiring the Dutch NFC pioneer earlier today and will be paying a $2 billion termination fee to NXP. While some analysts speculated the San Diego, California-based chipmaker may opt for another extension of its tender offer for all outstanding NXP shares, the company pulled out of the deal after unsuccessfully trying to receive approval from China for nearly two years. Sources close to the tech giant recently likened Beijing to a “stone wall” in regards to its unwillingness to advance its antitrust review, with that passive resistance presumably being a result of the ongoing trade war between the United States and the Far Eastern country.
Qualcomm is now moving into damage control mode after spending over 20 months on convincing investors the NXP tie-up is its safest bet on long-term growth, with its Board of Directors approving a new $30 billion stock repurchase program earlier today. The move will effectively triple the company’s existing repurchase initiative and create additional shareholder value in the near term but where Qualcomm goes from here remains to be seen, with the firm’s Thursday remarks only vaguely stating its long-term expansion ambitions remain unchanged. Washington pushed hard to save China’s ZTE from certain bankruptcy earlier this summer, having ultimately managed to have the Commerce Department’s denial order imposed over repeated violations of international trade sanctions replaced with a set of less harsh concessions. The move was interpreted as good news for Qualcomm by some industry watchers but the introduction of a 25-percent tariff on $36 billion of Chinese goods earlier this month appears to have killed any goodwill Beijing may have had following the ZTE lifeline.