Trump Reconsiders Qualcomm-NXP Deal Despite Qualcomm’s Intention to Walk Away

Qualcomm says it has 'no plans' to revive failed NXP bid

Despite efforts from both and USA and China to simmer down the heightened trade tensions between world's biggest economies, it seems things aren't exactly playing out the way they were supposed to. The planned deal was first agreed between the two companies in October 2016. Yesterday, China's president said the Chinese government would let the deal go through after all, but a Qualcomm official insists that the deal is is still dead.

In addition, Qualcomm has already moved ahead with a $30 billion stock buyback in the wake of the original acquisition failure, with $21 billion already spent, "making it significantly more hard to re-engage on a deal", said Rasgon.

Qualcomm abandoned the deal to buy NXP in July, after it was unable to secure Chinese regulatory approval.

As of this writing, it is still not clear whether Qualcomm and NXP will pursue the merger again.

Buying NXP, which specialises in computer chips for carmakers, would enable Qualcomm to diversify growth engines at a time of weak demand for smartphones and lacklustre results, said C.Y. Yao, a Taipei-based senior analyst with research agency TrendForce.

According to Reuters, people close to the two companies have revealed that they did not lobby the United States government to bring up the aborted merger during the negotiations, and were surprised to see it resurface as an issue.

Qualcomm had to pay NXP a $2 billion (approximately Rs. 14,100 crores) fee to terminate the deal.

The Trump administration had unsuccessfully lobbied the Chinese government earlier this year to give its blessing to the deal. Mellanox did not immediately respond to requests for comment. It has spent more than $20 billion (roughly Rs. 1.4 lakh crores) in share buybacks in the last 12 months.

Competition regulators in eight countries had approved the takeover.

In July, Qualcomm scrapped plans for a $44bn (£34bn) takeover of NXP after Chinese regulators signalled that they would block the takeover.

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