Qualcomm gobbles up NXP for $47 billion, largest semiconductor deal ever

Posted on Thursday, Oct 27 2016 @ 14:44 CEST by Thomas De Maesschalck
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Hot on the heels of AT&T's plan to acquire Time Warner there's another mega-merger in the making as Qualcomm announced it wants to take over Netherlands-based NXP Semiconductor for $47 billion. This is the largest deal ever in the semiconductor industry and it follows less than a year after NXP closed its $12 billion acquisition of Freescale.

Last year, Qualcomm was world's fourth largest semiconductor supplier, while NXP ranked seventh. NXP was formed ten years ago via the spin-off of the semiconductor activities of Philips. The company is the co-inventor of near field communication (NFC) technology and sources roughly 40 percent of its revenue from automotive-related electronics. The deal makes Qualcomm less dependent on the smartphone market.
Qualcomm Incorporated (NASDAQ: QCOM) and NXP Semiconductors N.V. (NASDAQ: NXPI) today announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Qualcomm will acquire NXP. Pursuant to the agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all of the issued and outstanding common shares of NXP for $110.00 per share in cash, representing a total enterprise value of approximately $47 billion.

NXP is a leader in high-performance, mixed-signal semiconductor electronics, with innovative products and solutions and leadership positions in automotive, broad-based microcontrollers, secure identification, network processing and RF power. As a leading semiconductor solutions supplier to the automotive industry, NXP also has leading positions in automotive infotainment, networking and safety systems, with solutions designed into 14 of the top 15 infotainment customers in 2016. NXP has a broad customer base, serving more than 25,000 customers through its direct sales channel and global network of distribution channel partners.

“With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry. The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realize all the benefits of the intelligently connected world.”

The combined company is expected to have annual revenues of more than $30 billion, serviceable addressable markets of $138 billion in 2020 and leadership positions across mobile, automotive, IoT, security, RF and networking.
Further details about the deal can be read at Qualcomm. The deal is expected to close by the end of 2017, pending regulatory approvals.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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