Market Overview

The Latest From China: Qualcomm-NXP Semiconductors Tie-Up 'Looking More Optimistic'

The Latest From China: Qualcomm-NXP Semiconductors Tie-Up 'Looking More Optimistic'

The proposed tie-up between Dutch-based NXP Semiconductors NV (NASDAQ: NXPI) and U.S.-based QUALCOMM, Inc. (NASDAQ: QCOM) has been going on for months.

What Happened

Qualcomm was forced to re-file its application to merge with NXP Semiconductors last month with Chinese regulators, which added another roadblock to a multi-long month wait for approval.

On Thursday, RBC Capital Markets' Amit Daryanani was quoted by Barron's as saying the likelihood of a merger has "improved over last few weeks."

On Friday, the analyst's thesis was reinforced by a Chinese official who was quoted by The Wall Street Journal as saying the likelihood of approval is "looking more optimistic now."

Why It's Important

Daryanani also said the approval from China's government would create a new company with "more discipline and consistent execution." The stock, the analyst said, should "see a sustained multiple expansion."

Investors appear to be reacting as expected with Qualcomm's stock trading higher by 1.4 percent. Shares of NXP Semiconductors was trading higher by nearly 4 percent at $110.74.

What's Next

The WSJ report cites an unnamed official and has not yet been confirmed by either company.

Related Links:

Bank Of America Turns Incrementally Bullish On Qualcomm, Highlights Multiple Catalysts

Qualcomm's Days Of Supplying To Apple Appear To Be Numbered


Related Articles (QCOM + NXPI)

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