Xi open to blessing Qualcomm-NXP deal

Xi open to blessing Qualcomm-NXP deal

USA chipmaker Qualcomm has said that it has no plans to resurrect an agreement to acquire Dutch rival NXP, despite comments by Donald Trump which suggested that the deal would now be approved by the Chinese government.

Popular US-based mobile chip maker Qualcomm could still reconsider a move to buy NXP after Chinese President Xi Jinping's statement at the G20 Summit that the matter could be revisited, suggests an analyst for TrendForce based out of Taipei. Afterward, Trump said Xi would consider giving a green light to a Qualcomm/NXP merger should the deal be presented to him again.

"Rising interest rates, pressure on Qualcomm's core business and weaker semiconductor fundamentals further complicate matters", they said. "Restarting the acquisition of NXP will help Qualcomm effectively disperse future operational risks without betting fully on smartphones", said Yao, adding that he believes the restart of the NXP deal should still be under consideration at Qualcomm despite its assertion the deal had been terminated as the deadline had expired. NXP declined to comment. Qualcomm has a large presence in China so they were not left with any real options except to cancel the deal. It spent $22.6 billion on buying its own stock in the 12-months ended September, using up cash reserves that had been intended for the NXP acquisition.

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The dissolution of the deal is one of the most apparent repercussions of the escalating trade between China and the United States, two of the largest economies in the world. The $3.4 billion (about Rs. 24,000 crores) deal, announced in March, is still awaiting Chinese regulatory approval.

Acquisitions of USA companies by Chinese companies, on the other hand, have been few and far between in the previous year, after the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinizes deals for potential national security risks, shot down more of these deals, such as Ant Financial's plan to acquire U.S. money transfer company MoneyGram International.

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