Qualcomm reportedly says it sees no prospect for NXP deal despite US-China trade truce

Key Points
  • Qualcomm said Monday that it considers the prospect to buy chip rival NXP as closed after the deadline for that transaction expired. 
  • Qualcomm tried to buy rival chip maker NXP for $44 billion earlier this year, but the deal fell apart when Chinese antitrust regulators did not approve it in time to meet a deadline.
  • In trade talks with President Trump on Saturday, Chinese President Xi said China would be open to approving the deal if it comes up again.
  • However, a deal may be unlikely, as both companies did stock buybacks and Qualcomm paid a $2 billion breakup fee.
President Donald Trump, left, and China's President Xi Jinping arrive for a meeting on the sidelines of the G-20 Summit in Hamburg, Germany. 
Saul Loeb | AFP | Getty Images

Despite signs that the deal could have been revived, Qualcomm said Monday it considers the prospect of buying chip rival NXP as closed, Reuters said.

The news followed after Chinese President Xi Jinping indicated he's open to approving a renewed deal for Qualcomm to buy NXP during trade talks with President Donald Trump on Saturday evening, according to a statement issued by the White House. The company, however, dismissed the idea.

"While we were grateful to learn of President Trump and President Xi's comments about Qualcomm's previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal," a representative for Qualcomm told Reuters in an email. "Qualcomm considers the matter closed."

Qualcomm first offered to buy NXP, which is based in the Netherlands, for about $38 billion in October 2016. However, it faced resistance from some NXP shareholders, who were holding out for a better price.

Qualcomm upped its bid to $44 billion in February, only to scrap the deal in July after a regulatory deadline passed without approval from China's State Administration for Market Regulation (SAMR), which oversees antitrust regulation.

In discussions with Trump, "Xi also stated that he is open to approving the previously unapproved Qualcomm-NXP deal should it again be presented to him," the White House said on Saturday.

The buy — billed as the world's largest semiconductor takeover — could have helped Qualcomm, which provides chips to Android smartphone makers and Apple, expand into new market areas like automotive chips.

Despite the positive indications from the Chinese government, a deal may be hard to negotiate, as both companies conducted stock buybacks after the deal fell through, and Qualcomm paid NXP a $2 billion break-up fee.

During a dinner at the G-20 summit in Argentina on Saturday, Xi and Trump discussed a number of issues, including a trade dispute that has left over $200 billion worth of goods hanging in the balance. The U.S. agreed not to raise tariffs from 10 percent to 25 percent for the time being, and over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture.

"This was an amazing and productive meeting with unlimited possibilities for both the United States and China," Trump said on Saturday.