The European Commission will issue its final verdict on the proposed $38 billion QUALCOMM, Inc. (NASDAQ:QCOM)-NXP Semiconductors NV (NASDAQ:NXPI) merger on June 9. The ruling is of great importance, some rivals having already aired their concerns given the stakes at hand if the deal is allowed to go through as it is.
Qualcomm-NXP Approval Standoff
EU regulators approving the deal is the last hurdle that Qualcomm hopes to pass as it looks to affirm its position and edge in the chips business. However, the proposed merger has come under immense pressure with current NXP customers remaining wary that such a deal will make it impossible for them to access some technologies.
Qualcomm is planning to use the $38 billion deal to affirm its position as the main supplier of chips used in the automotive industry. With the frenzy around autonomous cars and infotainment systems, the company believes it could generate a good amount of revenues from selling chips to auto companies.
While EU regulators can approve the $38 billion merger with or without concessions, rivals want to be assured that they will be able to access NXP technologies regardless of the outcome of the merger. The companies also want assurances that they will be awarded fair licenses in future.
The hurdles in Europe are in stark contrast to the U.S where the company has already been given the go ahead to finalize the deal. In a bid to gain regulatory approval in Europe, Qualcomm has sought to alleviate concerns that some of its business overlaps that of NXP.
Qualcomm Extends NXP Cash Tender Offer
Even as European regulators continue to deliberate on the deal, QUALCOMM said it will expand its cash tender offer for the purchase of NXP common shares. The current tender offer is set to expire on May 31, 2017. The giant chip maker says that as of May 1st a total of 50, 300, 920 shares had already been tendered at 14.9%, down from 54.8 million as of April 3, 2016. The number of shares tendered also reflect a 17.2% decrease from March numbers.
Qualcomm stock was down by $53.29 in Tuesday trading session ending the day at $53.29 a share.