Published: Tue, December 04, 2018
Markets | By Otis Pena

Kudlow: China openness on Qualcomm a sign of cooperation to come

Kudlow: China openness on Qualcomm a sign of cooperation to come

"While we were grateful to learn of President Trump and President Xi's comments about Qualcomm's previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal".

Xi Open to Approving Qualcomm-NXP Deal if Presented Again: U.S.

Following the meeting of President Xi and President Trump, China issued an official statement claim that President Xi did not mention his willingness to reconsider the approval of the Qualcomm-NXP deal should he deal be put up again.

Qualcomm has said there is no chance of it reviving the proposed takeover of Dutch rival NXP Semiconductors despite an apparent thawing in political opposition. "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.

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However, Reuters reports that Qualcomm representatives made it clear through an email, that the company considers the matter closed. NXP declined to comment. "If at the end of this period of time (90 days), the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%", the statement said. It is important to note that both parties, Qualcomm and NXP, have already walked away from the deal. Qualcomm used share buybacks of $5 billion to try to maintain its stock price for their shareholders after the deal was cancelled. In July 2018, the deal finally fell apart when China disapproved the deal. The massive merger between Qualcomm and NXP have been approving in eight other jurisdictions.

Thus far, other high-profile mergers and acquisitions involving United States companies in other sectors have received Chinese approval.

U.S. lawmakers also passed reforms earlier this year that increased CFIUS' scrutiny of deals.

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