Consequences of China's Failure to Approve Qualcomm's Acquisition

It's noon.

The world's largest chip merger case officially ended.

At 2:59 EDT on July 25th, China at 0:59 Beijing time on July 26th.

The deadline has arrived, and the whole world is waiting for the official news from China. However, I refreshed again and again, and finally got nothing.

Yellow.

Qualcomm acquired NXP, and the global semiconductor acquisition lasted 19 months; A case with a total value of $44 billion, involving two chip giants and supervised and audited by nine countries, was completely cooled down.

Maybe you don't understand that an American company bought a Dutch company and ended up in China?

Things need to start from 19 months ago.

Marry a rich man.

First of all, introduce the next two protagonists.

Qualcomm was founded in 1985 and has sold more than 7.5 billion chips. China is a good friend of mobile phone manufacturers and one of the most successful semiconductor companies in the world. At the same time, it has a near monopoly position in the field of mobile communication. In the era of smart phones, it is simply "lying down to make money." Facing the trend of AI and Internet of Things, it also embraced Mr. Thank you, and its peak market value reached $654.38+000 billion.

NXP, formerly known as Philips Semiconductors, was formally split from Philips Group in 2005. The world's top ten semiconductor manufacturers have an extraordinary position in the fields of automobiles, homes and other scenes, and their value once exceeded 40 billion US dollars.

So it is not difficult to guess why the two protagonists seek to be together.

You are in the prime of life, and I have noble family and capital. As long as we are together, we won't stay at 1 1.

But love is not something you want to buy. Buy it if you want.

To cooperate with Qualcomm NXP, you must obtain the consent of nine witnesses.

Yes, because oligopoly mergers and acquisitions are related to market competition. The merger and acquisition of these two companies must be approved by the regulatory authorities of major market countries, and it should be said that they are all possible. These nine countries mainly include the United States, the European Union, China, South Korea, Japan and Russia.

Therefore, since Qualcomm officially threw out this idea in June, 20 16, it started with the consent of various national regulatory agencies. This is a sincere effort to impress NXP shareholders and national regulators.

In this regard, Qualcomm showed a strong desire to get married.

First, Qualcomm raised the purchase price, increasing the dowry from $38 billion to $44 billion, not including NXP's debt of more than $654.38+00 billion.

Once the acquisition is completed, it will definitely be the largest semiconductor merger in history.

Qualcomm made it clear in both talent and historical significance.

Since then, Qualcomm has also passed the EU antitrust investigation, which is the most critical monopoly.

Qualcomm promises to continue to provide MIFARE technology and trademark license to NXP in the next eight years, and the license terms will be at least as good as the current terms.

MIFARE is a technology used for ticketing or charging platform. Qualcomm will ensure the same level of interoperability between its chips and the corresponding products of other companies in the next eight years.

In addition, Qualcomm will not acquire NXP's NFC standard essential patents and some NFC non-standard essential patents. These patents will be transferred to a third party, which will ensure that Qualcomm will obtain a global patent license free of patent fees in the next three years.

Finally, Qualcomm will not file a patent lawsuit against other companies for NXP's non-standard essential patents obtained by Qualcomm, and will provide authorization in the form of patent fees.

Perhaps you can often see and hear that the EU has always liked to impose sky-high fines on technology giants in the name of monopoly.

This time, however, the EU was moved.

In response to the above commitments made by Qualcomm, the European Commission said in a statement: "We finally came to the conclusion that after Qualcomm made corresponding commitments, there was no competition concern in this transaction. However, this decision is conditional and Qualcomm must abide by all its commitments. "

Bottom line: Remember your promise and take care of NXP in the future.

pass the ball

In addition, before joining the European Union, Qualcomm had successively settled in the United States, Japan and Russia. Even South Korea, eager to protect Samsung, has passed.

So the last and most crucial vote is in China's hands.

Say yes in China, the whole thing is; Say no in China, and the whole thing will be no.

One vote veto.

At the same time, Qualcomm even stopped planning the wedding.

however

The background of this semiconductor giant is relatively complicated. Its Chinese name is Broadcom and its English name is Broadcom. It's American. But because 20 16 was acquired by Avago in Singapore, Heart is more regarded as the heart of Singapore, or a Singapore company.

Although there is no Qualcomm, Tongjiaji ranks among the top ten semiconductors in the world. 2017110 in October, when Qualcomm lobbied for sincerity in various countries, Broadcom suddenly announced that it would buy Qualcomm for13 billion dollars.

Just like this wedding drama, Broadcom and Qualcomm experienced several rounds of bidding and competition for board candidates, which shocked the whole world. In line with Trump's "nationalism" style, Broadcom, a Singapore company, even said that it could immediately move its headquarters to the United States.

But Trump still refused, on the grounds that Broadcom's acquisition of Qualcomm might hinder the national security of the United States. "

In short, on March 12 this year, Qualcomm finally got rid of its idiot Broadcom and was able to focus on NXP.

Unexpectedly, at this time, great changes have taken place in Sino-US relations with the trade dispute.

As we said before, as long as China agrees, Qualcomm can formally marry NXP.

In fact, it was a smooth trip. According to the original plan, Qualcomm and NXP can officially obtain licenses on April 25th, 20th18th.

But then Qualcomm's motherland, the United States and Trump, started a trade dispute with China. At this time, ZTE, the "national prefix" company in China's communication industry, was also banned by the United States, and all chips were not supplied or used. ZTE is directly in a state of "no food to eat".

In fact, it didn't happen in one step. Before ZTE was banned, China secretly revealed: We also have cards here.

It is not difficult to guess that this card is the merger of Qualcomm and NXP.

Naturally, before the ZTE incident was resolved,

Qualcomm NXP Marriage Certificate is not available.

Therefore, the date of obtaining the license was pushed to May 25th, then to July 20th, and finally to July 25th.

In addition, Qualcomm made it clear that it would not continue to postpone the acquisition.

Before July 25th, Beijing passed and we got married. If Beijing fails, it won't take much energy and time.

Of course, in July of 12, another landmark event that was particularly beneficial to NXP occurred in Qualcomm: the ZTE incident was resolved.

It can be said that China mostly changed his personal feelings and passed it with his seal.

But China refused.

Qualcomm NXP, so yellow.

You may think, why does China have the right to make a decision when an American company merges with a Dutch company?

The reason for the program flow was introduced earlier. Let me start with the core reason why China can say "no".

According to the provisions of the State Council City, China on centralized declaration standards for operators:

Article 3 Where the concentration of business operators meets one of the following criteria, the business operators shall report to the competent commercial department of the State Council in advance, and concentration shall not be implemented without reporting:

(1) The total turnover of all operators participating in concentration worldwide in the latest fiscal year exceeded 654.38+0 billion yuan, and the turnover of at least two operators in China in the latest fiscal year exceeded 400 million yuan;

(2) The total turnover of all operators participating in concentration in China in the latest fiscal year exceeded 2 billion yuan, and the turnover of at least two operators in China in the latest fiscal year exceeded 400 million yuan.

Obviously, Qualcomm and NXP both won. Especially in Qualcomm, 65%-2/3 of the revenue of $22.3 billion in fiscal year 20 17 came from China market.

Of course, Qualcomm can bypass China and "elope" with NXP, but the corresponding price is also obvious: the China market, which contributes 2/3 of its revenue, will be lost.

Qualcomm's waywardness has little capital.

Now that the results have come out, China disagrees, and a long-term merger case is over.

Qualcomm's abacus also failed completely.

If the acquisition is successful, it means that Qualcomm will rank among the top three semiconductor manufacturers in the world, second only to Samsung and Intel.

In addition, this is an obvious strong alliance.

Although Qualcomm has a good performance in the field of SoC and modem products have a good market share, it is mainly concentrated in the field of mobile communication.

Although the valuation of NXP is lower than that of Qualcomm, it covers a wide range of fields, including automotive electronics, microcontrollers, sensors, radio frequency, power supply and so on.

There is no doubt that NXP has exactly what Qualcomm wants to make future bets in the fields of Internet of Things, smart homes and smart cars.

This is essentially a future-oriented combination.

But it backfired, so Qualcomm had to find another way out.

However, it is worth mentioning that Qualcomm is also a decent man. As stated at the beginning of the acquisition, Qualcomm paid NXP $2 billion as compensation for the failure of the acquisition.

Early this morning (after the US stock market closed on Wednesday), Qualcomm released its financial report for the third fiscal quarter of fiscal year 20 18, with revenue of $5.6 billion, up 4% year-on-year, and net profit of $ KLOC-0/200 million, up 4 1% year-on-year.

When I made a fortune, I said it again: If it is not finished by today, I won't buy it. Of course, if you don't buy it, you will have to pay NXP a $2 billion breakup fee.

To appease his shareholders, Qualcomm announced that if the transaction was cancelled, he would take out $30 billion from his $40 billion cash reserve to buy back shares to boost the stock price. In other words, I will be the recipient of my own stock.

You know, the total market value of Qualcomm has just exceeded $80 billion.

Qualcomm shares rose 6.58% after hours.

NXP was even worse, falling 2% yesterday and 4% a few hours later.

Well, the whole melon is in the sauce ~

End—

Intern recruitment

'?' ? Track the new trends of AI technology and products.

Related Questions and Answers: Which country does Qualcomm come from? Qualcomm is an American radio communication technology research and development company, which was established in July. 1985. It has played an important role in promoting the development of wireless communication through technological innovation, and is famous for its leading position in CDMA technology, which has become the fastest developing wireless technology in the world. Qualcomm attaches great importance to research and development, and has provided technology licenses to more than 65,438+000 manufacturers, covering all brands of telecommunication equipment and consumer electronic equipment in the world. Today, Qualcomm actively advocates the rapid deployment of 3G networks, mobile phones and applications around the world. Hope to adopt.