Qualcomm is reportedly set to refile an application with China’s government seeking approval for its takeover of NXP Semiconductors, as the US chip giant looks to avoid a collapse by giving regulators more time to rule on the deal.
Securing regulatory approval from China is the final hurdle for Qualcomm in its bid to clinch a $44 billion takeover of NXP Semiconductors. The deal was given the green light by eight of the nine global regulators required.
However, the process has been held up by China’s Ministry of Commerce (Mofcom) as trade tensions behind the country and the US heighten.
With China’s stance up in the air, Reuters reported Qualcomm withdrew an earlier application this weekend following a request by the commerce ministry, as a deadline of 17 April to rule on the deal approached.
Qualcomm will now refile its application, which will give Mofcom another six months to review the tie-up and thus avoid an entire collapse.
Speaking to Reuters, Andrew Gilholm, director of analysis for China and North Asia at risk consultancy Control Risks said China is holding the deal “hostage”, in light of a looming trade war with the US.
US President Donald Trump slapped tariffs on up to $60 billion-worth of Chinese imports last month in retaliation for alleged intellectual property theft and unfair competition practices. China responded by proposing tariffs on $50 billion-worth of US imports.
Erick Robinson, director of patent litigation and licensing at Beijing East IP added Mofcom is unlikely to decide on the deal while tensions between the US and China remain heightened.
“Qualcomm is going to have to wait for Washington and Beijing to resolve their differences before this deal is going to move forward,” said Robinson.
Last month, Bloomberg reported Mofcom also wanted Qualcomm to propose more remedies to the deal to satisfy competition concerns after Chinese companies operating in the semiconductor segment called for the acquisition to be blocked.
However, sources said Qualcomm believes these claims are unfounded and offered guarantees to Mofcom that existing NXP Semiconductors’ customers will not have to acquire additional Qualcomm licences as a result of the deal.