(Yicai Global) July 27 -- China regrets Qualcomm's decision to abandon its bid to buy NXP Semiconductors and still hopes to find a way to resolve the antitrust concerns raised, the country's regulator said, two days after the US chipmaker pulled out of the US44 billion deal because Chinese approval wasn't forthcoming.
"We hope to continue to communicate with Qualcomm and that we can find a suitable solution to resolve the issues within the review period," the State Administration for Market Regulation said today after Qualcomm's self-imposed deadline to conclude the deal expired at 11.59 p.m. New York time on July 25. "The results of our evaluation showed that Qualcomm's latest plan could not resolve competition issues."
The market watchdog said the acquisition, the industry's biggest ever, would have a profound impact on the global semiconductor market and extended its review window to Oct. 14 from Aug. 15. While it expressed regret at Qualcomm's decision, the agency also said it respected the decision.
California-based Qualcomm had been planning to take over its Dutch counterpart since October 2016 and had consent from eight other jurisdictions, including the European Union and Russia. The solitary holdout was China whose approval was required because Qualcomm and NXP are big players in the country, which is the world's biggest market for semiconductors and cars.
The acquisition represented an opportunity for Qualcomm to cut its dependence on the slowing smartphone market and focus more on auto chips.
Qualcomm Chief Executive Steve Mollenkopf recently commented that "there were probably bigger forces at play here than just us." Earlier today, China's Ministry of Commerce rejected any suggestion that the issue was connected to the ongoing China-US trade dispute.
Failure to pursue the takeover means Qualcomm will now pay NXP a USD2 billion termination fee. But its shares [NASDAQ:QCOM] soared 7 percent yesterday because the company pledged to buy back up to USD30 billion worth of stock. NXP said that it would repurchase USD5 billion of its own shares.
Editor: Emmi Laine