Let me tell you: American company Qualcomm once wanted to acquire NXP, but Beijing refused to give the green light, making the deal difficult to complete

HK MingPao
2025.04.07 02:31

U.S. chipmaker Qualcomm had planned to acquire Dutch NXP Semiconductors for $47 billion, but the deal was not completed due to the lack of approval from Chinese regulators. Although the transaction had no direct connection to the Chinese market, the influence of Chinese regulation was significant, and Qualcomm ultimately abandoned the acquisition in 2018, paying a $2 billion breakup fee. Qualcomm's revenue heavily relies on the Chinese market, and the deal required scrutiny from Chinese regulators, with external observers generally believing that this move may be related to the China-U.S. trade friction

[ Ming Pao News ] CK Hutchison Holdings (0001) plans to sell its Panama port business, but there are still variables regarding whether this transaction can be completed smoothly. Even if the deal has no direct connection to the Chinese market, past precedents have shown that the influence of Chinese regulatory authorities is not limited to their domestic market and can even affect global corporate mergers. A typical case is the acquisition of Dutch semiconductor company NXP Semiconductors by American chip giant Qualcomm.

Chinese Regulatory Authorities Can Influence Overseas Acquisitions

Qualcomm announced in October 2016 that it planned to acquire NXP Semiconductors for $47 billion to expand its business into automotive electronics and the Internet of Things. According to international antitrust regulations, the transaction required regulatory approval from nine jurisdictions, including the United States, the European Union, and South Korea. Although the first eight regions gave their nod, the deal was delayed due to the escalating U.S.-China trade war, and the State Administration for Market Regulation (SAMR) of China did not approve it in time. In July 2018, Qualcomm ultimately abandoned the acquisition due to the expiration of the transaction deadline and paid a $2 billion "breakup fee" to NXP. Additionally, Qualcomm immediately launched a $30 billion share repurchase plan to appease investors.

Qualcomm's Revenue Relies on the Chinese Market

Qualcomm's revenue primarily depends on the Chinese market, with about two-thirds of its revenue coming from China at that time. According to China's Anti-Monopoly Law and related regulations, if the global annual turnover exceeds 10 billion yuan and at least two companies have revenues exceeding 400 million yuan in the Chinese market, the transaction must undergo regulatory review by Chinese authorities. Although this acquisition did not involve Chinese companies, it still required approval from Chinese authorities.

At that time, Chinese Ministry of Commerce spokesperson Gao Feng emphasized that the transaction involved antitrust review and was unrelated to U.S.-China trade frictions. However, there was widespread belief that the Chinese government might use this as leverage against the United States rather than purely based on market competition considerations

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