Can Qualcomm-NXP get past China-US trade disputes?
Eight of nine global antitrust regulators have given the nod of approval for Qualcomm’s acquisition of NXP Semiconductors NV. The only one that Qualcomm still needs to win over is China, with which it plans to meet this week.
Qualcomm hopes to acquire the company for $44 billion to diversify the company past a slowing smartphone market.
The deal is expected to clear, but only under certain conditions. People close to the deal have reported that Chinese regulators will only accept the deal if President Trump lifts the seven-year US ban on Chinese telecommunications company ZTE Corp. This was due to the company’s violating of US sanctions against Iran and North Korea.
Further, this acquisition was first proposed in October 2016, but because of US-China trade disputes, it has been stalled significantly. Qualcomm even had to refile their request in April due to its expiration.
While talks have taken years, a decision seems to be approaching. Qualcomm will meet Chinese regulators on Saturday, which could likely create a decision. Members of Qualcomm and the State Administration for Market regulation met on Friday, and they reported a successful discussion about their future.
Unfortunately for Qualcomm, this business strategy comes at a time of political strain. China will likely not budge until a decision about ZTE is made. Due to President Trump’s nationalistic policies, a lift of this ban is unlikely. However, Qualcomm’s acquisition of NXP may be in the American economy’s best interest.
Featured image via Wikimedia Commons