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NXP shares jump after report China resumes Qualcomm deal review


By Arjun Panchadar

(Reuters) - NV's shares jumped as much as 11.7 percent on Monday after a report that has resumed review of U.S. chipmaker Qualcomm Inc's proposed $44 billion buyout of the Dutch company.

China's commerce ministry has been asked to speed up the review of the deal and Qualcomm's proposed remedies to protect local companies, reported, citing people familiar with the matter.

The report said local firms are concerned that the deal would extend Qualcomm's patent licensing business into areas such as mobile payments and autonomous driving.

Shares of Qualcomm rose as much as 4.7 percent in early trading.

The U.S. chipmaker, which announced its bid for NXP in October 2016, raised it in February to $127.50 per share and in return received binding agreements from nine NXP stockholders including hedge funds and Soroban Capital Partners LP, who had led the opposition to the deal.

Clinching the biggest deal in the sector is crucial to Qualcomm, which is seeking to diversify its customer base and become the leading to the fast-growing automotive market.

Qualcomm has already received approval from eight of the nine required global regulators to finalise the acquisition. Chinese clearance is the only one pending, with regulators continually stalling the takeover amid U.S.-trade tensions.

In April, Qualcomm refiled its application for the deal, giving regulators more time to decide.

The Chinese commerce ministry later that month said Qualcomm needs to do more to complete the takeover as the U.S. company's initial set of remedies to resolve competition issues were insufficient.

Analysts expect the deal to get approval after on Sunday pledged to help get "back into business" and save Chinese jobs after a U.S. ban hurt the Chinese

"The most 'logical' thing for to do was to (eventually) approve the deal, but to extract as much as possible out of Qualcomm in the process," wrote in a client note.

Approval of the deal is not definite and still could be delayed, the report said, citing the sources.

"Should this happen it would benefit Lumentum, Qualcomm, NXP and Marvell Technology," of said.

Lumentum's $1.7 billion bid to buy optical components and chipmaker Marvell's bid to acquire in a $6 billion deal are also awaiting Chinese antitrust approval.

The report did not say who asked the ministry to speed up the review, or what Qualcomm has proposed.

"With regard to matters related to the proposed acquisition of NXP by Qualcomm, we encourage you to get in touch with Qualcomm," NXP said in an email.

Qualcomm declined to comment.

(Reporting by Beijing Monitoring Desk and in Bengaluru; Editing by and Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, May 14 2018. 21:16 IST