Qualcomm To Fork Over $2 Billion In Terminated NXP Semiconductors Deal

It has been a week of revelations when it comes to Qualcomm. The chipmaker announced during its earnings call that Apple decided against using any Qualcomm modems in its 2018 iPhone line. That is perhaps unsurprising considered the long-running and bitter legal war the two companies have waged. In other news, an acquisition deal between Qualcomm and NXP was first announced in late 2016 and at the time the price was tipped to be $47 billion. The final offer made early this year was valued at $44 billion.

Qualcomm

Qualcomm announced early this morning that it is walking away from the entire NXP Semiconductors deal. The termination of the deal between NXP and Qualcomm River Holdings B.V., which is an indirect and wholly owned subsidiary of Qualcomm, is effective immediately. The purchase agreement between the two firms had a golden parachute for NXP if Qualcomm backed out.

That parachute has been deployed with Qualcomm having to fork over $2 billion for the failed deal and the payout was made July 26, 2018. Along with the termination of the deal, Qualcomm River Holdings has also terminated its previously announced cash tender offer to acquire all outstanding shares of NXP. As Qualcomm squashes the deal that has been in the works for years, it has also announced a new impetus. It is reported that Qualcomm was unable to secure approval of the deal from China, which forced its hand.

Qualcomm's Board of Directors has also authorized a stock repurchase program of $30 billion that replaces the $10 billion stock repurchase authorization. Qualcomm plans to execute the majority of the stock repurchase program by the close of fiscal 2019. Qualcomm says that this repurchase program and other previously announced objectives, including its plan to drop $1 billion into new growth industries, leaves it "well-positioned to drive significant accretion and value for stockholders." 


Via:  Qualcomm
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