BEIJING–Chinese antitrust regulators weighed in on Qualcomm Inc.'s busted acquisition of Dutch chip maker NXP Semiconductors with their own statement: Don’t blame us.
China’s State Administration for Market Regulation–the last of nine regulators around the world needed to green- light the deal–said Friday that Qualcomm’s latest proposal failed to address competition concerns. The regulator said it had extended its own deal-review deadline to Oct. 14.
“Qualcomm and NXP decided to abandon the deal as the deadline the two parties agreed on expired. [We] regret this,” the regulator said, adding that it had hoped to continue communicating with Qualcomm and resolve the remaining issues within the review period.
Qualcomm and NXP didn’t immediately respond to requests for comment.
Qualcomm ditched its $44 billion bid Wednesday, the latest deadline it had set for completing the acquisition. It cited the stalled process in China, having extended the deadline in April while awaiting Chinese approval. The acquisition had been announced in October 2016.
The San Diego-based chip maker will pay a $2 billion termination fee to NXP.
Chinese officials have publicly insisted that the delay had nothing to do with escalating trade friction with the U.S., but people with knowledge of the situation have told the Journal that the friction is the main reason for it. China can’t keep pace with the U.S. on retaliatory tariffs–it imports far less from the U.S. than the U.S. imports from China–but it has other weapons including holding up U.S. M&A deals and business license approvals, these people say.
For Beijing, seeking to develop its own semiconductor industry, blocking the NXP acquisition pays an added dividend: It hinders the growth of Qualcomm, which has a commanding position in cutting-edge chip technology, longtime China economist Christopher Balding has pointed out.
With NXP, Qualcomm would have gained a company that reported $9.26 billion in revenue last year and employs some 30,000 people. Qualcomm itself had $22.29 billion in sales in its latest fiscal year, and a similar number of employees.
In its statement, China’s antitrust authority said it treats companies of home and abroad on an equal footing and will ensure fair competition for all.
“[We] welcome companies from all countries, including Qualcomm and NXP, to invest and do business in China.”