Qualcomm CEO Faces Investor Pressure After NXP Deal Collapse

Qualcomm Chief Executive Officer Steven Mollenkopf is facing pressure from investors following the collapse of the company's proposed acquisition of NXP Semiconductors, a Dutch silicon manufacturer and NFC pioneer. The deal, valued at $44 billion, was called off on Thursday after its final deadline passed before China sent its approval, something the Far Eastern country likely wasn't planning to do regardless of how long Qualcomm kept delaying the proceedings and extending its tender offers. As a result, the San Diego, California-based tech giant will now pay a $2 billion termination fee to NXP and is forced to look toward the future on its own, without being able to buy its way into having a significant foothold in emerging technology segments such as mobile payments and connected vehicles.

Wisconsin Capital Management founder Tom Plumb told Reuters he believes Mr. Mollenkopf has approximately two more years to prove he can continue growing Qualcomm without major M&A deals taking place or face the risk of being replaced. Qualcomm used China as an excuse to gain the U.S. government's help to fight off Broadcom's hostile takeover attempt from earlier this year, with one of treasury department's panels ruling the deal would allow China to take over the U.S. in the 5G race as it believed Broadcom would engage in aggressive cost-cutting efforts following the acquisition, as it traditionally does after every tie-up.

It was precisely China that ended up blocking Qualcomm's expansion ambitions in the end, with Beijing reportedly being uncooperative in regards to advancing its antitrust probe of the company's bid. The development is believed to be a result of the ongoing trade war between the U.S. and China but may also be partially related to Qualcomm's previous maneuver that attracted focus to China as Washington's tech and economic adversary in an attempt to save the company from being taken over. Following the latest turn of events, Qualcomm is expected to make an all-in bet on 5G.

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