Embedded and mobile chip giant Qualcomm has confirmed that it is planning to abandon its £33.4 billion deal to acquire NXP Semiconductor, following push-back from Chinese regulators.
Announced all the way back in October 2016 as a done deal, Qualcomm had trumpeted the acquisition of NXP Semiconductors as being the perfect blend. 'By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT,' Qualcomm chief executive Steve Mollenkopf said of the deal at the time, 'we will be even better positioned to empower customers and consumers to realise all the benefits of the intelligently connected world.'
Nearly two years on, though, and the deal is officially on the rocks. During the company's quarterly earnings call late last night, Qualcomm confirmed that it was calling off its acquisition following a lack of approval from Chinese regulators - which some, including the New York Times, have tied to US President Donald Trump's ongoing trade war with the nation as a potential retaliatory action.
As a result of the deal's cancellation, Qualcomm is on the hook for a £1.52 billion cancellation fee. The company has announced a £22.75 billion stock buy-back plan to shore up its share price - which, combined with better than expected revenue results, appears to have appeased investors: The company's shares are up 4.34 percent in pre-market trading on the back of the announcement.
Qualcomm itself was the target of a hostile takeover attempt by smaller rival Broadcom beginning late last year, though a presidential order put paid to any such acquisition taking place.