US-based Qualcomm abandoned last week a 44-billion-US-dollar deal with semiconductor manufacturer NXP. It would have been the world’s biggest ever semiconductor sector takeover but the deadline passed without the NXP deal winning approval from Chinese regulators. The Chinese government said the issue was related to anti-monopoly law enforcement and was not related to the recent China-US trade frictions.
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Battle Over Chipmakers: Qualcomm Drops NXP Deal
Hello and welcome to the world. I was me anyway coming to you live from Beijing on CTG. And we begin today with Qualcomm's was scrapped. Forty four billion dollar deal with NXP U.S. made the Qualcomm bender last week. What would have been the world's biggest ever semiconductor sector take over after the deadline passed without the deal winning China's approval. The Chinese government said the issue was related to Antimonopoly Law Enforcement.
Let's take a look at the latest a bid for a merger abandon after a two year wait American chip maker Qualcomm dropped its acquisition of Dutch based NXP semiconductors.
After the deadline for the transaction which needed China's support passed last Thursday the Ministry of Commerce said China's decision to not extend support for the multibillion dollar deal was not a result of trade tensions with theU.S. China's Foreign Ministry clarified it was about Antimonopoly Law Enforcement.
Heightens relevant departments examined Qualcomm's acquisition of Annex. According to the provisions of antima monopoly law.
During the examination process China's relevance Department has maintained good communication with kwaak on China's State Administration for market regulation said in a statement on Friday that proposals put forth by the firm to resolve antitrust concerns were insufficient but had hoped to continue communicating with Qualcomm. Chinese regulators said the antitrust review period to August 15 with an extended deadline of October 14 Qualcomm's proposed forty four billion dollar merger was first announced in October 2016 aimed at the broader array of products including sensors and microprocessors for smart devices.
In the past months acquisition had received antitrust clearance from eight of the nine required government regulatory bodies around the world. While
awaiting China's approval bleeders approval came from the EU. At the beginning of the year the San Diego wireless pioneer had extended a deadline several times before the final date was to light 26 since the deadline passed without China's support. Qualcomm eventually dropped the NXP deal and paid 2 billion dollars in termination fees as agreed before the war on the section of China U.S. trade tensions on mergers and acquisitions whether it has to do or not.
With the Qualcomm issue we are joined in our Beijing studio Professor John gong from the University of International Business and Economics also in Beijing. We have from you read to pouco the resources and the mark. Thank you for being with us in New York. We have Max Wolff professor of economics from School University. Gentlemen I want. Welcome to the three of you. Let me ask you first a Professor Wolff about your reaction to the failure this time that Qualcomm be able to acquire NXP.
Look we've seen a lot of various trade tensions and recriminations. Not clear exactly what was the cause here. There are a couple of possibilities and it looks like although there's been some sort of somewhat raising the flag for conflict around the world does it look like there was an outright rejection as much as the time ran out here and clearly there are some legitimate concerns about concentration in the market. If you look at the mobile phone space it is heavily dominated by basically Qualcomm and Intel and there's some evidence that we'd all be better off with a little bit more.