MADISON, Wis. – As Qualcomm continues its lonely courtroom battle against the world, the San Diego-based smartphone chip behemoth is fighting for approvals of its proposed NXP acquisition with a global army of antitrust regulators.
After the relatively lenient U.S. antitrust forces cleared the merger without conditions, Qualcomm’s next hurdle is a preliminary review by the EU competition authority, set to conclude on June 9. The EU could approve the deal with or without conditions.
Reuters reported Friday that Qualcomm had until June 1 to propose concessions to allay possible competition concerns about what would be the biggest-ever deal in the semiconductor industry. The company has not done so thus far.
If the EU opens an investigation of any serious concerns, this could delay a resolution by up to four months to the process.
Qualcomm appears to be banking on its ability to convince regulators that the deal is not anti-competitive. If it fails, it might have to offer concessions.
Smartcard chip technology at issue?
The product portfolios of Qualcomm and NXP are deemed largely complementary. Hence it’s not clear what might exactly trigger EU to balk over the merger.
Reuters, quoting unnamed sources, pointed out, “Rivals had urged the European Commission to ensure they would still be able to use NXP technology known as Mifare once the deal is done.”
Asked why NXP’s smartcard chip technology, controlled by Qualcomm, could be an issue in Europe, Rob Lineback, senior market research analyst at IC Insights, gave EE Times two potential theories.
“The potential rivals could be worried about Qualcomm selling Mifare to a Chinese business as part of its efforts to win approval from China for the acquisition of NXP,” he said. In this case, the premise is that China’s MOFCOM (Ministry of Commerce), increasingly driven by industrial policy, could target the Qualcomm-NXP deal by demanding material divestitures as a condition of clearance.
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