US chip maker Qualcomm has walked away from its US$44 billion (RMB 299 billion) bid for NXP Semiconductors after failing to secure the approval of China’s antitrust regulators for the biggest takeover in the chip industry, becoming the highest-profile victim since a trade war broke out between the two economies.
The merger agreement expired at noon Hong Kong time last Thursday (July 26th), nearly 21 months after Qualcomm first offered to buy the Dutch chip maker. Beijing’s silence on the acquisition led the US company to believe that approval - critical for the deal to be effective in the world’s largest consumer market - would not be given. Qualcomm first announced the acquisition in October 2016, and eight of the nine countries – including the US and Japan – where Qualcomm does business signed off on the deal. Beijing remained the lone obstacle. The acquisition was considered strategically important as the US and China are both racing to dominate 5G technology, the next stage for telecommunications networks.
Beijing’s silence on the deal will also exacerbate tensions between the world’s two largest economies as their trade war escalates. Early this month, Trump imposed US$34 billion (RMB 231 billion) in tariffs on Chinese goods, with billions more to come in coming weeks.