Qualcomm’s proposed acquisition of NXP Semiconductors requires more remedies to gain approval, after an initial review into the deal by Chinese antitrust regulators found issues which are “hard to resolve”.
The Wall Street Journal cited comments from Gao Feng, a representative of China’s Ministry of Commerce (Mofcom), who said a preliminary review into the tie-up found it was “difficult to eliminate the negative impact” of the deal.
Speaking in a media briefing, Feng reportedly did not provide specifics into the problems it found, but said Mofcom’s review had looked at the impact the deal will have on Chinese companies, adding Qualcomm needed to make more concessions to address its concerns.
Qualcomm previously indicated it does not believe these concerns are founded, as Chinese companies will not be required to acquire additional licences to use its technology as a result of the deal.
Feng did note there was still a chance the deal could be approved and promised a fair review, amid increasing trade tensions between China and the US.
Qualcomm seeks more time
Qualcomm this week refiled its application to secure approval for its takeover of NXP Semiconductors with China’s antitrust regulators, in a bid to buy more time for the authorities to rule on the deal. The deadline for its initial application was due to expire on 17 April, putting the deal at risk of collapse.
The US company secured approval from eight of the nine required global regulatory bodies to proceed with the tie-up, with only China remaining. By refiling, Mofcom has another six months to make its decision.
However, the conflict between China and the US continues to escalate, which arguably reduces the chances of Qualcomm of achieving a favourable decision.
This week, the US blocked Chinese vendor ZTE from purchasing equipment from US companies for seven years, and both countries have issued tariffs on imports.
Addressing the situation with the US, as well as ZTE’s recent ban, Feng said “the action targets China. However, it will ultimately undermine the US itself”.