- Qualcomm has officially terminated its 2-year-old bid to acquire its Dutch competitor NXP for $44 billion.
- The US semiconductor company has been stuck in a regulatory standoff. China is the last of nine global regulatory bodies left to approve the deal.
- In June, it looked like China would approve the deal, but it has since gone silent as tensions heated up with President Trump.
- Qualcomm's board authorized a $30 billion stock buyback in place of the acquisition, which it will enact before the end of fiscal 2019.
The $88 billion San Diego semiconductor maker Qualcomm officially drop its $44 billion bid for NXP, nearly two years after first announcing its plans to acquire the Dutch competitor, the company announced early Thursday morning.
The company first confirmed its intention to let the bid expire on Wednesday, barring any action by Chinese regulators.
"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," CEO Steve Mollenkopf said in a statement Wednesday. "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."
On Thursday, Qualcomm paid NXP a $2 billion breakup fee, according to the company.
Qualcomm first announced plans to acquire NXP in October 2016, but the deal faced regulatory roadblocks, heightened by tensions between the US and China. The company has extended its offer before but said in April that it would let its offer expire if it was not approved by Chinese regulators before July 25.
Qualcomm and NXP received approval from eight different global anti-trust regulators, and until July it looked like it would get approval from the final regulatory body in China. But things took a turn for the worst in recent weeks after President Trump proposed new tariffs on Chinese imports.
A merger between Qualcomm and NXP, both semiconductor companies, would have expanded Qualcomm's reach into the automotive industry as well as the industrial internet of things.
Qualcomm President Cristiano Amon told Business Insider recently that while NXP would accelerate its product roadmap, losing the acquisition doesn't change the company's overall strategy.
"It's been close to two years that we've been waiting the NXP acquisition, and a lot has happened in two years," Cristiano R. Amon, president of Qualcomm, told Business Insider. "We had built a diversified business already. NXP accelerates that strategy. It does not bring a new strategy, it just makes it bigger and faster."
