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The Qualcomm M&A plot thickens with increased NXP bid

Chip giant Qualcomm has upped its bid for NXP in a bid to placate some investors and maybe complicate Broadcom’s attempted hostile takeover.

Scott Bicheno

February 20, 2018

2 Min Read
The Qualcomm M&A plot thickens with increased NXP bid

Chip giant Qualcomm has upped its bid for NXP in a bid to placate some investors and maybe complicate Broadcom’s attempted hostile takeover.

Qualcomm’s bid for NXP back in October 2016 was accepted by the NXP board, so you’d think that would be that. But there were some grumbles from institutional investors at the time and the NXP share price has improved a further 20% or so since the bid was announced, so Qualcomm decided to up the bid from $110 to $127.50, which equates to around $6 billion.

A possible by-product of this move may be to complicate Broadcom’s hostile acquisition, which was originally based on the original NXP purchase price. Qualcomm’s board is clearly not keen on the Broadcom move and, with only China left to approve the move, presumably thinks it has an even stronger argument in favour of remaining independent with NXP on board.

“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 Steve Mollenkopf, Qualcomm CEO. “With only one regulatory approval remaining, we are working hard to complete this transaction expeditiously. Our integration planning is on track and we expect to realize the full benefits of this transaction for our customers, employees and stockholders.”

“The acquisition of NXP will enable us to accelerate our growth strategy,” said Tom Horton, Presiding Director of the Qualcomm Board. “The Board unanimously believes this is an attractive acquisition at this price for Qualcomm stockholders based on NXP’s recent strong financial performance, the growth in key strategic areas such as Auto and IoT and our high confidence in management’s ability to execute upon the synergy opportunities.”

Paying more for NXP may put off Broadcom if it doesn’t think Qualcomm is getting good value for money, but that in turn may antagonise existing Qualcomm shareholders, especially the ones tempted by Broadcom’s offer. The balancing act continues and Broadcom’s next move may be critical.

About the Author(s)

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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