NXP Semiconductor’s CEO Richard Clemmer conceded a proposed sale to Qualcomm may not complete until early 2018, as the deal continues to face regulatory scrutiny.
In the company’s Q3 earnings announcement, Clemmer said NXP was “working diligently” with Qualcomm and the various regulators towards a close this year, but added “at this point the timetable is very tight”.
Qualcomm announced intentions to acquire NXP in October 2016, in a deal which at the time was worth $47 billion. Qualcomm lined up the purchase as it aims to bolster its proposition in areas adjacent to its mobile core, including IoT and security.
The European Commission (EC) opened a probe in June, expressing concerns the transaction could lead to higher prices and reduced innovation in the semiconductor industry.
Earlier this month, Qualcomm offered concessions to allay any antitrust concerns, in a bid to push the acquisition through.
Specific details on the proposed concessions were not revealed, but Reuters reported Qualcomm had offered to give up certain patents, pledged to offer interoperability and allow rivals to use NXP products.
The investigation, which has already been suspended twice by the EC, continues to rumble on. Qualcomm said recently it still aims to complete the deal this year.
In his comments, Clemmer also reiterated his belief the deal with Qualcomm, which is valued at $110 per share, is “compelling” and “would close strategic gaps in both the automotive and IoT space”.
Aside from regulatory concerns, the deal also faced criticism from activist investor Elliot Management, which owns a 6 per cent stake in NXP, which said Qualcomm’s bid “significantly devalued”, the chip maker.
Clemmer said NXP “continues to support and recommend the $110 Qualcomm offer for acceptance to NXP shareholders.”
NXP reported revenue of $2.39 billion in Q3, a 3 per cent decline year-on-year. Operating profit was also down 6 per cent, reaching $163 million.