The US chipmaker said in its third quarter fiscal 2018 report that the company will not extend its offer to acquire NXP.
In the report, while commenting on the results from the quarter, Qualcomm CEO, Steve Mollenkopf, said: “We intend to terminate our purchase agreement to acquire NXP when the agreement expires at the end of the day today, pending any new material developments. In addition, as previously indicated, upon termination of the agreement, we intend to pursue a stock repurchase program of up to $30 billion to deliver significant value to our stockholders.”
As the report was released yesterday (July 25 2018) and the agreement also expired yesterday at 11:59 p.m. New York time; Qualcomm has officially given up on NXP.
Qualcomm had offered to acquire NXP Semiconductors N.V. for estimated total cash consideration to be paid to NXP’s shareholders of USD 44 billion. However, the transaction hit a few bumps along the road and ran into a halt as it never gained regulatory clearance from the State Administration for Market Regulation in China (SAMR) and other closing conditions, including the tender of at least 70% of the issued and outstanding common shares of NXP in the offer.
As the company never received any approval from SAMR by the end date, NXP will be entitled to receive a termination fee of USD 2.0 billion, which will be paid using existing cash and cash equivalents, Qualcomm states in the report.
Following the termination of the proposed acquisition, Qualcomm intend to implement a stock repurchase program to repurchase up to USD 30 billion of its outstanding common stock.