Qualcomm to Scrap NXP Deal
Qualcomm had until midnight in New York on July 25 to get sign-off from regulators, who have delayed approval for months. While the companies haven't commented in the hours after the deadline passed, China said the deal has nothing to do with trade tensions with the U.S.
Since the deal is ending, Qualcomm will be forced to go it alone in its push into automotive silicon as it tries to reduce its reliance on the slowing smartphone market, where it's facing more competition and legal battles with customers. Earlier on Wednesday, Qualcomm said it intends to pay NXP a $2 billion breakup fee and plans to buy back as much as $30 billion in stock if the purchase is scrapped. NXP's management, after almost two years on hold, will now have to find a way to convince customers and investors it has a strong future as an independent company.
"We didn't see anything in the near-term that would make it worthwhile to change the timing. There were probably bigger forces at play here than just us," Qualcomm Chief Executive Officer Steve Mollenkopf said in an interview before the deadline. "We are still fans of the deal and the logic behind the deal."
Qualcomm had been offering $127.50 per share for NXP and the transaction was approved by both sets of shareholders and government agencies in Europe, the U.S. and elsewhere.
Qualcomm also reported fiscal third-quarter sales that topped projections and gave an upbeat revenue forecast for the fourth quarter.
Sales will be $5.1 billion to $5.9 billion in the fourth quarter, which ends in September, the company said in a statement Wednesday. Profit in the third quarter was $1.01 a share excluding certain items. Revenue climbed to $5.6 billion.
Qualcomm also predicted on Wednesday that Apple would drop the company's chips from its next-generation iPhones in favor of modems from Intel, the latest sign of fallout from their acrimonious battle over pricing and licensing costs. Qualcomm's revenue projections had already assumed it would gain no new revenue from Apple.
Intel and Apple both declined to comment.
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