Qualcomm, NXP Semiconductors Strike $38B Semiconductor Deal

0
Qualcomm, NXP Semiconductors Strike $38B Semiconductor Deal

Qualcomm (NASDAQ: QCOM) has agreed to acquire NXP Semiconductors (NASDAQ: NXPI) for $110 per share in cash and debt, a premium of 11.5% to NXP’s closing price Wednesday. The deal represents an enterprise value of $47 billion and an equity value of about $38 billion for NXP, a Dutch manufacturer of semiconductors with a market cap of roughly $34 billion. The newly combined business expects to have annual revenues of around $30 billion, meaning it will join Intel and Samsung as one of the three largest semiconductor companies in the world.

Qualcomm – NXP Semiconductors Deal

Qualcomm closed Thursday’s trading up 2.77%, at $70.09 per share, while NXP stock climbed 0.43% after the announcement of the deal to finish at $99.08.

Exclusive: Voss Value Launches New Long Only Special Situations Fund

Since its inception in January 2012, the long book of the Voss Value Fund, Voss Capital's flagship offering, has substantially outperformed the market. The long/short equity fund has turned every $1 invested into an estimated $13.37. Over the same time frame, every $1 invested in the S&P 500 has become $3.66. Q1 2021 hedge fund Read More


For Qualcomm, the acquisition signals a pivot away from the flagging smartphone sector toward a heavier focus on the IoT. The deal could lead to additional synergies in the mobile, networking and automotive industries—particularly the latter, as NXP is a leading provider of chips for automakers.

The agreement marks the third major combination in the semiconductor industry this year. In July, SoftBank (TKO: 9984) announced its plans to buy British chipmaker ARM for £24 billion, while Avago Technologies (NASDAQ: AVGO) completed its purchase of Broadcom for $37 billion in February. In the wider tech space, only the recently completed Dell-EMC mega-merger exceeds the Qualcomm-NXP deal for total value during 2016.

Such big-box deals have made IT the strongest M&A sector QoQ for a while now, with corporate pickups helping drive deal value to $138 billion in 3Q, according to PitchBook’s 3Q M&A Report. With median IT deal size jumping to $47 million and average deal size exceeding $1 billion, 3Q roughly doubled the results from last quarter.

Average & median IT deal size ($M)

Qualcomm, NXP

Chart featured in our 3Q M&A Report (click to access)

Article by Adam Putz, PitchBook

No posts to display