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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Inappropriate for MLAs seeking free IPL tickets, says D.K. Suresh
Bengaluru: Bengaluru Milk Union Ltd President D.K. Suresh on Monday said it is inappropriate for MLAs to seek free IPL tickets, adding that those interested in watching matches should pay for them personally.
Speaking to reporters near his residence in Sadashivanagar, he said, “IPL is a commercial tournament and does not represent the country. It is not right for public representatives to focus too much on such matters.”
Referring to the recent controversy during the RCB celebrations, he said, “let us find out who benefited the most from the statements made during the incident.” He also pointed out that BJP MLAs had received IPL tickets as well.
Responding to discussions about relocating the Chinnaswamy Stadium, Suresh said the government has already approved the construction of a new stadium at a location he had proposed.
“I had suggested building a stadium in Surya City and submitted a proposal for it. Bengaluru needs four stadiums in four directions to cater to its growing population and encourage youth participation in sports,” he said.
He noted that apart from Kanteerava Stadium, KSCA, and the Football Stadium, there are limited facilities in the city.
“When I was a Lok Sabha member, I had proposed allocating 100 acres in my constituency at Surya City. The land was later earmarked and the plan approved,” he added.
Suresh said he has discussed the project with Minister Zameer Ahmed Khan, Rajiv Gandhi Housing Corporation Chairman Shivalingegowda, and Anekal MLA Shivanna.
“The Cabinet has now approved the project, and a stadium will be developed on around 50–60 acres,” he said.
He further added that he has requested the Deputy Chief Minister to build another stadium at Shivarama Karanth Layout through the BDA, where 40 acres have been allocated. Plans are also being discussed to develop a well-equipped stadium in Bidadi.
Commending state government's recent bilingual policy move, Suresh said forcing children to learn three languages could affect their comprehension.
“It is a good decision to make two languages compulsory. Learning a third language should be left to the choice of students and parents,” he said.
Responding to criticism from BJP leaders, he said their tendency is to oppose every decision of the government.
“To please their central leadership, they take a pro-Hindi stance. Instead, they should advocate for the adoption of Kannada in all states,” he said.
When asked about the earlier three-language policy under Congress, he said, “the situation is different now. Today, the focus should be on quality learning. Kannada should remain the primary language, while students and parents can choose an additional language.”
