Market Overview

The Qualcomm-NXP Semiconductors Saga Has Finally Come To An End

The Qualcomm-NXP Semiconductors Saga Has Finally Come To An End

NXP Semiconductors NV (NASDAQ: NXPI) traded down 8 percent and QUALCOMM, Inc. (NASDAQ: QCOM) up 6 percent Thursday after confirming the termination of their merger. CNBC had reported the cancellation Wednesday afternoon.

Qualcomm River Holdings had previously pursued the Netherlands chipmaker for $44 billion, but Chinese regulators held up the deal amid the ongoing trade conflict with the U.S. The buyer walked away before officials announced a decision.

Why It’s Important

Qualcomm, whose merger deal with Broadcom Inc (NASDAQ: AVGO) was thwarted by the U.S. government thwarted earlier this year, will pay a $2 billion termination fee and forfeit expansion into new industrial markets.

On a positive note, funds from the cancelled transaction are now free to be applied toward a $30 billion stock buyback. The repurchasing program replaces the firm’s existing $10 billion program.

What’s Next

Qualcomm aims to execute most of the buyback before the end of the 2019 fiscal year. The company will continue to pursue expansion opportunities.

"Our core strategy of driving Qualcomm technologies into higher growth industries remains unchanged,” Qualcomm CEO Steve Mollenkopf said in a press release.

Qualcomm shares were trading around $63.05 in the pre-market session; NXP was trading around $93.90.

Related Links:

Investors 'Wait With Baited Breath' Following Conflicting Reports On Qualcomm-NXP Deal

NXP Semiconductors' Standalone Value Is $119, SunTrust Says In Downgrade

Image credit: Kārlis Dambrāns, Flickr

Posted-In: ChinaM&A News Top Stories Tech Best of Benzinga


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