(Yicai Global) July 24 -- Qualcomm will have to pay the largest compensation fee in the history of semiconductor mergers if China rules tomorrow that the US chipmaker's plan to buy NXP Semiconductors would breech anti-trust laws, or even if the country's regulators make no statement at all.

The California-based company has heard nothing from Chinese regulators about its proposed USD43 billion takeover of the Dutch firm, a Qualcomm executive familiar with the deal told Yicai Global in an exclusive interview. The deadline for the deal is 11:59 p.m. New York time tomorrow. If that's missed, Qualcomm will need to cough up USD2 billion in recompense.

"We cannot afford to linger on the deal any longer," the anonymous executive said. "Otherwise we would put our shareholders in a difficult situation. The costs are just too high."

The acquisition needs to be approved by nine jurisdictions. China's anti-monopoly regulator is the only one that has not said 'yes' so far after South Korea and the European Union gave consent in January following a series of commitments and concessions made by Qualcomm. In April, China's Ministry of Commerce said it was reviewing the deal, now in its 19th month, and gave preliminary feedback.

"Generally we get into contact with the State Administration for Market Regulation through our external lawyer," the Qualcomm executive said. "But we have not received any news."

SAMR has not yet received any notice related to antitrust, and will release relevant news, if any, on its official website, a source close to the newly established body told Yicai Global.

Given the current situation, the merger will not be easy to progress from any point of view, according to a number of industry insiders.

Qualcomm and NXP have been waylaid by the trade conflict between the United States and China as well as US President Donald Trump's scuppering in March of a USD105 billion bid by Singapore-based Broadcom to acquire Qualcomm. Though Broadcom is not Chinese owned and is listed in the States, the president cited national security concerns for blocking the deal. If the US can scupper takeovers by citing national security, then China can do the same.

China's latest institutional reform program means a number of anti-trust agencies previously scattered among the Ministry of Commerce, the National Development and Reform Commission, and the State Administration of Industry and Commerce, have been combined into the State Administration for Market Regulation.

In early May, the commerce ministry's anti-monopoly bureau was also merged into SAMR. Yicai Global learned from a number of authoritative sources that the ministry's original team is still responsible for the Qualcomm-NXP merger case.

Editor: Emmi Laine