Qualcomm raises bid for NXP to $44 billion

February 20, 2018 // By Peter Clarke
Qualcomm Inc. (San Diego, Calif.) has raised its offer for NXP Semiconductors Inc. to $127.50 per share in cash and lowered the minimum tender threshold to 70 percent to try and get its long-running deal done.

The new price values NXP at $44 billion compared with the previous offer of $110 per share which valued NXP at about $38 billion. Qualcomm has also announced that agreement has been reached with nine NXP stockholders who collectively own 28 percent of the outstanding shares in NXP. These stockholders include funds affiliated with Elliott Advisors (UK) Ltd. and Soroban Capital Partners LP, two firms that were lobbying for an increased offer from Qualcomm. Qualcomm has also extended the offer period to the end of March 5, New York time.

NXP shares jumped in value to $126 on news of the deal.

If successfully concluded the acquisition will help Qualcomm fend off the unwanted attentions of Broadcom Ltd.

Qualcomm said that the revised offer reflected NXP's calendar 2017 results, which has exceeded the assumptions of its transaction model on revenue, gross margin and earnings before income tax.

The combination of Qualcomm and NXP would create a semiconductor company to compete as the third largest behind Samsung and Intel with annual revenues of about $30 billion. The deal would help Qualcomm get into embedded and automotive markets, where its own RF skills are in increased demand, while its dilutes its exposure to the declining growth in the smartphone market

"Qualcomm’s leading SoC capabilities and technology roadmap, coupled with NXP's differentiated position in automotive, security and IoT, offers a compelling value proposition," said Qualcomm CEO Steve Mollenkopf, in a statement. "With only one regulatory approval remaining, we are working hard to complete this transaction expeditiously."

The transaction remains contingent on clearance from the Ministry of Commerce (MOFCOM) in China. Qualcomm said it is optimistic it will receive MOFCOM clearance in the near term.

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News articles:

Broadcom raises offer for Qualcomm, puts NXP deal under pressure

Qualcomm must raise offer or abandon pursuit of NXP

Europe approves Qualcomm-NXP deal

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