China could finally approve the deal
Chinese authorities have been delaying Qualcomm’s (QCOM) acquisition of NXP Semiconductors (NXPI) as the US-China relationship had soured due to trade friction. This approval is the last hurdle for the American chip maker.
According to a May 26 report in The Wall Street Journal, Chinese regulators seem to be ready to approve the NXPI acquisition in the next few days. This appears to be a sign that the trade tensions between the two countries are easing. Recently, China approved the long-pending acquisition of Toshiba’s (TOSYY) memory chip unit for $18.0 billion to a consortium led by Bain Capital.
The acquisition could be a big positive for Qualcomm
The back-and-forth action in the US-China trade war has been one of the main reasons that the markets have been choppy since March. The acquisition of NXP Semiconductors is critical for Qualcomm, as it’s looking for growth in other segments. The Dutch company, which is known for pioneering near-field communication used in Apple Pay, also supplies components to the automotive industry, a sector that could see high growth.
Qualcomm stock is down 6.3% in 2018 but has risen 17.3% in the last month, as the odds of the NXPI deal being approved have increased.