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Qualcomm ‘offers concessions to EU over NXP takeover’
Posted on Wednesday, 11 October 2017 14:54
US semiconductor and telecommunications equipment maker Qualcomm has issued a proposal to the European Union (EU) relating to the company’s planned acquisition of NXP Semiconductors, two sources told Reuters.

According to the people, the buyer has offered to pick up the business without its standard essential patents in a bid to secure regulatory approval from the body.

In addition, it has committed to forego legal action against other parties relating to the target’s near field communication patents, except for defensive purposes, and will allow competitors’ products to work in combination with its technology.

The sources added that it submitted its proposal on 5th October.

Rivals and customers of the companies involved have been asked to provide feedback on the potential solution to the European Commission by the end of this week.

The EU was originally concerned that the enlarged business could have an unfair advantage over competitors as it would be able to combine its products and sell bundles to clients and could also make changes to NXP’s intellectual property licensing practices.

Qualcomm originally agreed to acquire the Dutch semiconductor manufacturer for USD 47.00 billion in cash back in October 2016.

However, in June of this year the EU opened an in-depth investigation into the combination, saying it could lead to increased prices, less market choice and lower levels of innovation in the semiconductor sector.

According to Zephyr, the M&A database published by Bureau van Dijk, the most valuable deal targeting a semiconductor manufacturer to have been announced worldwide since the beginning of 2017 is Bain Capital’s USD 17.71 billion acquisition of Toshiba Memory.

This was one of 716 deals to have been signed off in the industry this year; it was followed by a USD 7.28 billion injection in China-based Tsinghua UniGroup by Sino-IC Capital.

Other semiconductor manufacturers targeted in high value deals this year include NVIDIA, Renesas Electronics, ASML Holding and STMicroelectronics.

© Zephus Ltd