Qualcomm terminates NXP acquisition, must pay $2 billion termination fee

The purchase would have marked the largest chipset deal ever

After nearly two years of acquisition efforts, Qualcomm has terminated its offer to purchase NXP Semiconductors, taking on a $2 billion termination fee.

The chipset giant will pay the fee to NXP on July 26th, 2018 and has authorized a stock repurchase program of $30 billion. The company expects to buy back the majority of stock before the close of fiscal year 2019.

Though Qualcomm gained approval for its acquisition of NXP from antitrust regulators in Europe and Korea in January 2018, China’s State Administration for Market Regulation (SAMR) held off from providing the stamp of approval.

When Qualcomm reported its third-quarter earnings, the company set a firm expiration date of July 25th, 11:59pm ET — giving SAMR the chance

While there was a chance that SAMR could approve the merger before 11:59PM ET yesterday, July 25th, the regulator let that deadline expire.

This comes as trade conflicts continue to grow between the U.S. and China following the imposition of new tariffs by the U.S.

Qualcomm first offered to purchase Netherlands-based NXP for $38 billion USD in October 2016, then upped the bid to appease some upset NXP shareholders to offer $44 billion in February 2018. If it had gone through, the purchase would’ve been the largest deal in chipset history.

Source: Qualcomm