SHANGHAI (Reuters) – China's market regulator said it still hopes to find a solution to antitrust concerns that Qualcomm Inc ( QCOM.O ) spent $ 44 billion (£ 33.57 billion ) Acquisition of NXP Semiconductors ( NXPI.O ) after it was determined that the proposals to solve the problem were missing.
FILE PHOTO: Visitors are being seen by a Qualcomm Inc. booth at the China International Big Data Industry Expo in Guiyang, Guizhou Province, China, on May 27, 2018. REUTERS / Stringer
US company Qualcomm abandoned on Thursday After a deadline that companies complied with, China was the largest semiconductor acquisition in the semiconductor industry.
China's State Market Regulatory Authority (SAMR) said in a statement Friday that the companies' proposals to address Chinese antitrust concerns were inadequate, but hopes to continue communicating with Qualcomm.
The Chinese move is probably too late for a resurgence of the agreement, which became involved in a political dispute between Washington and Beijing. Upon completion of the transaction, the two companies announced large buybacks and Qualcomm has already paid NXP a $ 2 billion sales charge.
"I assume that the SAMR statement one day after the deadline contradicts the view that the deal-approval process has been politicized, not to revive it," said Andrew Gilholm, head of analysis for China and North Asia at the Management Consulting Control Risks.
"This of course goes against many people's view of the agreement that the situation in the US and China has become the main obstacle, not the impact on competition."
The collapse of the agreement could exacerbate tensions between Washington and Beijing in the midst of an evasive trade conflict that shook relations between the two largest economies in the world.
Qualcomm, the world's largest smartphone chip maker, said on Wednesday it would drop the bid for NXP unless a last minute reprieve from China was filed. There was no word from SAMR, the antitrust authority, who reviewed the deal as the deadline for the deal expired.
The Chinese regulator said on Friday that it was open to further negotiations for approval of the agreement. It added that the current review period would expire on 15 August with an extended review period on 14 October.
"The results of our evaluation showed that the latest Qualcomm plan was unable to resolve competition issues," the regulator added, informing the chipmaker about the decision.
"We hope to continue communicating with Qualcomm and can find a suitable solution to solve the issues within the reporting period."
When she was asked to comment on SAMR, a Qualcomm spokeswoman pointed to the announcement of the deal's completion. NXP could not be reached immediately for a comment.
Caught in the Trade War?
China's Commerce Ministry said on Thursday the Qualcomm case concerns anti-monopoly issues and not with China-US. Trade frictions.
Qualcomm, however, saw things differently.
Qualcomm chief Steven Mollenkopf told CNBC in an interview Thursday that the company had been involved in a trade war, while US Treasury Secretary Steven Mnuchin said it was disappointing and demanded that US companies be treated fairly.
The Chinese market regulatory agency added in its statement that the country would treat all companies fairly and that China was open to foreign companies investing and doing business in the country.
Gilholm of Control Risks said the big question for US firms and politicians would be whether the issue would hit other businesses with American companies.
"The United States will certainly consider it political, no question," he said. "What we do not know yet is whether it's unique or not, I guess that's the next question."
Reporting by Adam Jourdan; Additional reporting by Kanishka Singh in Bangalore; Edited by Muralikumar Anantharaman