EC puts Qualcomm-NXP investigation on hold, slowing merger approval
Please pass the paperwork
Qualcomm would like to spend around US$39 billion to acquire NXP Semiconductors, but the European Commission is taking its sweet time over its approval for the takeover.
Dutch automotive and Internet of Things specialist NXP became a takeover target in June 2017. As we reported at the time, the US Department of Justice waved the deal through without conditions.
The European Commission, however, has different considerations, because NXP is one of the largest semiconductor businesses in its orbit. After being spun out of Philips, NXP scaled up considerably by acquiring Motorola's silicon spin-out Freescale. NXP's Mifare smartcard technology is also sensitive in Europe.
So in June, the commission warned it was worried whether Qualcomm's licensing model would lift prices, and whether the company's scale would let it put too much pressure on rivals.
Investigating the NXP deal, the European Commission had asked Qualcomm to disclose more information about the deal and since that hasn't yet arrived it suspended its considerations in August.
Had all the paperwork been filed on time, a decision would have been due in October. But Forbes reports December is now the likley date, as the EC guarantees to resolve these things in a set time once it gets its paperwork. Without paperwork, the clock re-starts.
The EC's latest pause on the investigation is likely to result in a further delay to the takeover.
Qualcomm has faced criticism, probes, and fines for its intellectual property licensing practices in several jurisdictions.
It had to cut a billion-dollar deal to get off the hook in China, there are already two EU probes into its trade practices, and the US International Trade Commission kicked off a Section 337 Investigation in August. ®