Trump says China is now open to Qualcomm-NXP deal

Chinese President Xi Jinping

USA chipmaker Qualcomm has said that it has no plans to resurrect an agreement to acquire Dutch rival NXP, despite comments by Donald Trump which suggested that the deal would now be approved by the Chinese government.

However following talks between US President Donald Trump and Chinese President Xi Jinping at the G20 Summit in Argentina, Washington said the Chinese government was willing to grant the necessary approvals.

Eight regulators around the world approved the Qualcomm-NXP deal, but Chinese regulators refused to wave it through.

In what was reportedly set to be "the biggest semiconductor deal globally", Qualcomm announced plans to acquire NXP Semiconductor back in 2016. Qualcomm was given just an hour's notice by the Trump administration about Xi's comment on the NXP deal, and its inclusion in the White House statement, according to two of the sources.

However, Reuters reports that Qualcomm representatives made it clear through an email, that the company considers the matter closed.

"Although that acquisition can not be resuscitated, Xi's comment reveals in plain sight that Chinese antitrust policy is inherently politicized", said Scott Kennedy, a China expert at the Center for Strategic and International Studies in a blog post. The deal previously fell apart as it failed to secure Chinese regulatory approval. Qualcomm spent Dollars 22.6 billion on share buybacks in the 12-months ended September, using up the cash reserves it had set aside for the acquisition and ending any possibility of a renewed bid. NXP declined to comment. "If at the end of this period of time (90 days), the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%", the statement said. It spent $22.6 billion on buying its own stock in the 12-months ended September, using up cash reserves that had been intended for the NXP acquisition.

Since then, Qualcomm has paid the $2 billion breakup fee owed to NXP and embarked on an accelerated share repurchase program. Now, chip companies may be more optimistic about their regulatory chances in China.

Regulators in eight countries approved the deal, including in the USA and Europe.

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