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Qualcomm may acquire NXP Semiconductors in a $30 Billion+ deal

Qualcomm, Snapdragon 835
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According to reports from various quarters, Qualcomm is acquiring NXP Semiconductors in a huge $30 Billion+ deal. Qualcomm is shelling out around $110 per share and while nothing has been officially confirmed, rumors stipulate that the deal could be announced as early as the next week.

NXP Semiconductors is a Netherlands based global semiconductor manufacturer entity. The company has over 45,000 employees in  various capacities in over 35 countries and at the last count, generated revenues well in excess of 6 Billion. It is also the fifth-largest non-memory semiconductor supplier globally. The company has a significant presence in Secure Identification, Automotive and Digital Networking industries.

Considering the services it offers, NXP should go well with Qualcomm. The latter is a global leader in all sorts of electronics and acquiring NXP will help it further strengthen its portfolio.

Rumors of a Qualcomm-NXP deal had been floating around since September. If it actually goes through though, it will bring about further consolidation to the Semiconducter space which has been witness to a fair amount of big M&As lately.

One of the recent, notable example of the same came in form of ARM’s acquisition by SoftBank, in a deal valued at $32 billion. NXP Semiconductors in its present form is the result of consolidation as well, and it acquired its present girth after merging with Freescale Semiconductor in a deal worth almost $40 billion last year.

Apparently, NXP asked Qualcomm for a $120 price per share, in order to consider an acquisition. Eventually, the companies agreed to settle upon $110 per share. Considering the per share price and NXP’s market cap, the deal may have a value somewhere between $35-$37 Billion. That would make it overtake Softbank’s $32 Billion acquisition of ARM as well.

The deal would probably be a good strategic maneuverer from a business standpoint. Qualcomm already has a well entrenched position in mobile. By partnering with NXP, it will also get a boost in automotive and identification niches. And who knows what new products the company might come up with then.

Following publications from various prominent media houses, Qualcomm shares jumped up by around 2.4 percent to reach $68.97 on Friday morning. NXP shares on the other hand, registered a fall of about 2.5 percent and came to rest in the neighborhood of $102. Meanwhile, we are likely to see further ups and downs once the deal is officially announced.

 

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