China’s approval was important for the Qualcomm-NXP deal
The deal faced several hurdles over the last 21 months, but in the end, it was caught up in the US-China (FXI) trade war, something that was beyond the control of the two companies’ managements.
Because Qualcomm-NXP was a cross-border acquisition and would have far-reaching effects, it needed approval from nine countries’ antitrust regulators, including China’s, as China is the largest consumer of semiconductors and automobiles. Qualcomm secured all regulatory approvals except that of China’s SAMR (State Administration for Market Regulation).
In April, Qualcomm refiled its NXP deal for approval and stated that it would withdraw from the deal on July 25 if it did not secure the SAMR’s approval. On July 25, both Qualcomm and NXP waited, but there was no communication from the SAMR, so the two companies called off the deal.
On July 27, the SAMR stated that it had evaluated Qualcomm’s revised plan and had provided feedback on competition issues, but the company hadn’t addressed these concerns. The SAMR also stated that it was extending its review of the deal from August 15 to October 14, even after the two companies had walked away from the deal.
Responding to the SAMR’s statement, Qualcomm pointed to its press release on the cancellation of the deal, indicating that it was no longer interested. US media reports called the SAMR’s statement an attempt to avoid the blame for the cancellation of the world’s largest semiconductor acquisition.
Next, we’ll look at NXP’s reaction to the failed acquisition.