Qualcomm Struggling to Close NXP Acquisition as Broadcom Looms Large

Published Date : Jan 30, 2018

Negotiation room that Qualcomm Inc. had when it initially started a bid to acquire NXP Semiconductors NV for a whooping price of US$47 billion over a year ago, is shrinking quickly against a takeover challenge coming from Broadcom Ltd.

Over the course of next fortnight, Qualcomm is up against a few events that will decide the fate of the promise it had made but is struggling to keep up, including a release of its earnings, stockholders meeting, and possibilities of a decision from the Chinese regulatory who may or may not approve the takeover. Qualcomm has been criticized for its slowness in negotiating with the NXP stockholders, who are demanding an improvement on $110-a-share offer that was initially made.

Chinese Ministry of Commerce remains the primary hindrance that is yet to open its cards on the NXP deal, essentially waiting for Qualcomm to free up enough concessions in order to justify an approval. There are possibilities that Qualcomm may ask for incremented fee against its superior technology in segments such as mobile payments once the deal goes through, making it harder for domestic companies that are operating in the /chip manufacturing market.

It must be noted that Qualcomm is the largest chipmaker as far as smartphones are concerned and has pledged to not acquire NXP’s standard and non-standard patents such as near-field communication. Once the deal is deal, NXP will be able to maintain its licensing terms for MXP Mifare technology, which is utilized in swipe cards including at the London Underground.