Published in Mobiles

Qualcomm and NXP to refile Chinese Regulatory Approval

by on20 April 2018

Suddenly don’t like the proposal

China is not making it easy for Qualcomm and NXP and it has asked both companies to refile application for Chinese Regulatory Approval.

That means Qualcomm and NXP need to withdraw and then refile the application for Chinese regulatory approval. The Ministry in China with a very unfortunate English abbreviation Ministry of Commerce in China (MOFCOM) requested that the companies start from scratch.

It only took them a year to tell both parties that it was unhappy with the agreement. China is definitely strong arming US based companies due to the recent US administration trade related fight.

China - - officially doesn’t say it is related, but of course it is and of course it would never acknowledge that. As a result of the unfortunate delay, Qualcomm and NXP have extended the purchase agreement to July 25 2018. The end date is now changed from April 25, 2018 to July 25, 2018 in the hope that the Chinese government will give them the green light. If the deal goes through, Qualcomm promised to pay NXP the previously agreed termination fee of $2 billion.

Every other regulatory agency, seventeen of them we were told, including some dicey and detail oriented ones like Korea and the bureaucracy oriented EU have already given the deal the go-ahead.

It seems like that NXP shareholders really want the deal to succeed as it would give both companies safer ground from possible hostile acquisition. Qualcomm was saved from one, but who is to say that NXP might not be an easy target for some other firms like Broadcom. Of course, we would have EU bureaucrats to prevent that from happening.

The worst part is that a lot of China based companies will be very affected if the Qualcomm deal fails. Qualcomm is a gateway to the US market for many China-based manufacturers.

China’s MOFCOM believes that the proposed acquisition would have a substantial impact on the technology companies in China and cause some negative effects to the market.

Luckily for Qualcomm, it was repeatedly said to Fudzilla by company executives that Qualcomm doesn’t need NXP for its automotive aspirations and sales deals are happening as we speak,but having NXP sales channels and contacts would definitely help future growth.

Last modified on 20 April 2018
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