US-China Trade battle is bringing up some serious tensions for top tech giants. US microchip manufacturer Qualcomm is one of those, as the company's US$44 billion deal to take over NXP Semiconductors is yet to get the approval from the Chinese government at the verge of the deadline on this Wednesday.
The deal initiated back in October 2016, when Qualcomm was gazing up with its efforts to make superlative development in terms of next-gen technology of 5G connectivity in association with NXP Semiconductors. After 21 months of the initiation of the deal, Bejing administration stays as the only stopping force before the final approval on this deal.
Qualcomm-NXP Merger's Current Condition:
Among the nine countries where this merger of both Qualcomm and NXP Semiconductors will be effective in operation, eight nations have already approved the deal, including Japan as well. The merger is only left to get the official green signal in China. Stacy Rasgon, a semiconductor analyst at Alliance Bernstein expressed her thoughts over the deal by saying: "The most rational thing for the Chinese government to do is to approve. But not everything is rational right now."
As the cut-off point for this deal approaches near, major concerns arise for both the companies over the final conclusion of the merger. However, things seem to be positive on the Chinese government's end, as private sources familiar to this amalgamation proposal recently stated that the Ministry of Industry and Information Technology of China (MIIT) is favoring the merger.
Chinese Government's Take On Qualcomm-NXP Deal:
The sources also noted that MIIT is examining the effects of this deal over Chinese Technology industry. Soon as it completes the review process it will give the approval to it. The State Administration for Market Regulation has already cleared the antitrust nod on this merger in the last month, according to South China Morning Post.
NXP's share price has been lowered by 16 percent since mid-June at US$100.66, whereas Qualcomm's offer price is US$127.50. This unwanted stock fall of NXP is creating serious concerns among the investors and the market experts about the merger's real future. However, Qualcomm and NXP both are expecting to see an accountable rise in their stock price before the last quarter of this year.
Latest Update:
According to the latest updates of The Verge, Qualcomm is finally planning to cancel the deal for acquiring NXP Semiconductors. Qualcomm CEO Steve Mollenkopf stated now: "We intend to terminate our purchase agreement to acquire NXP when the agreement expires at the end of the day today, pending any new material developments."
