Qualcomm scraps $45 bn NXP deal after no response from China
San Francisco, July 26: San Diego-based chipmaker Qualcomm has walked away from buying Dutch firm NXP Semiconductors for $45 billion after the Chinese regulators did not grant last-minute approval to the deal.
The two companies entered into a deal in October 2016, with the deadline to close the deal extended several times as the companies waited for China to approve or deny the merger.
Eight of the nine countries where Qualcomm has businesses had approved the deal.
With no answer from China's Ministry of Commerce as the deadline passed (it was 9.30 a.m. Indian time on Thursday), it was clear that the merger was officially dead.
"We intend to terminate our purchase agreement to acquire NXP when the agreement expires at the end of the day today, pending any new material developments," Steve Mollenkopf, CEO of Qualcomm Incorporated, said in a statement late on Wednesday.
"In addition, upon termination of the agreement, we intend to pursue a stock repurchase program of up to $30 billion to deliver significant value to our stockholders," he added as the company announced results for its fiscal third quarter that ended June 24.
However, Qualcomm will shell out a break-up fee of $2 billion to NXP Semiconductors that makes automotive, security and Internet of Things (IoT) solutions.
The chip-maker reported revenue of $5.6 billion, saying the revenue in the third quarter grew four per cent year-on-year. The net income was $1.2 billion.
"We reported results significantly above our prior expectations for our fiscal third quarter, driven by solid execution across the company, including very strong results in our licensing business," Mollenkopf said.
The company also announced that it does not expect to supply wireless chips for upcoming iPhones.
Qualcomm is a major supplier of 4G chips for smartphones.
According to CNET, Apple has been using Intel 4G chips for some iPhone models and Qualcomm chips for others.
"We believe Apple intends to solely use our competitor's modems rather than our modems in its next iPhone release," Qualcomm Financial Chief George Davis was quoted as saying.
Apple and Qualcomm have been fighting over patents since the beginning of 2017.
"Qualcomm didn't say which company will supply modems for the next iPhone, but it is believed to be Intel," the report added.
With iPhone 7 and 7 Plus launch in 2016, Apple began using Intel chips in some variants of iPhones.
However, some media reports said Apple has reportedly conveyed a message to Intel, saying it will not be using the chip-maker's 5G modems for 2020 iPhone models.
Earlier reports suggested that Apple was turning to Taiwanese mobile chipset maker MediaTek for its communications components and that the California-headquartered tech giant was looking to move away from using Intel processors altogether by 2020.
Apple started using Intel components in modern iPhones as it wanted to reduce its dependence on chips from Qualcomm, with which it got entangled in a long legal battle.
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India, Russia unveil new measures to broaden trade, economic ties between countries
PM Modi bats for bringing peace to Ukraine
New Delhi (PTI): India and Russia on Friday firmed up a five-year plan to bolster economic and trade partnership in the face of Washington's punitive tariff and sanctions regime even as Prime Minister Narendra Modi conveyed to President Vladimir Putin that the war in Ukraine must be brought to an end through dialogue.
Following their summit talks, Modi and Putin unitedly demonstrated their keenness to impart a fresh momentum to the trajectory of the over eight-decades-old partnership between the two nations.
Besides finalising the 2030 economic programme, the two sides signed several agreements to expand cooperation in a number of sectors including health, mobility and people-to-people exchange.
"Over the past eight decades, the world has witnessed numerous ups and downs. Humanity has had to pass through many challenges and crises. And amidst all this, the India-Russia friendship has remained steadfast like a pole star," Modi said in his media statement.
ALSO READ: India not neutral, it is on the side of peace: PM Modi to Putin on Ukraine conflict
The prime minister, referring to the economic roadmap, said taking the India-Russia economic partnership to new heights is now a common priority for both sides. Modi also said that India and Russia are working towards early conclusion of a free trade agreement with Eurasian Economic Union.
The Ukraine conflict also figured prominently in the talks with Modi saying that India has advocated for peace in that country.
"We welcome all efforts being made for a peaceful and lasting resolution of this matter. India has always been ready to contribute its part and will remain so in the future," he said.
On threat of terrorism, Modi said India and Russia have long been standing shoulder-to-shoulder in the fight against the menace.
"Whether it is the terrorist attack in Pahalgam or the cowardly assault on the Crocus City Hall - the root of all these incidents is the same," he said.
"India's unwavering belief is that terrorism is a direct assault on the values of humanity and that global unity against it is our greatest strength," he added.
Modi said India-Russia cooperation in the critical minerals sector is crucial for ensuring secure and diversified supply chains across the entire world.
ALSO READ: Russian President Putin says India, Russia collaboration not directed against anyone
In his remarks, Putin said the two sides resolved to prioritise cooperation in areas of security, economy, trade and culture.
We are looking at increasing annual bilateral trade volume to USD 100 billion, he said.
Putin said Russia is also looking at expanding cooperation in the energy sector with New Delhi, adding his country is ready for uninterrupted shipments of fuel to India.
We could also talk about cooperation in construction of small modular nuclear reactors and floating nuclear power plants, he said.
Russia, India and other like-minded nations are working towards a just and multipolar world.
