China kills Qualcomm’s $44 billion deal for NXP

A massive cross-border semiconductor company merger, between San Diego-based Qualcomm and Netherlands-based NXP (Next eXPerience), has died after being strung along for over 20 months by Beijing.

• The $44 billion merger required approval by China, in addition to eight other jurisdictions where the two companies conduct significant business, but “Beijing dragged its review out to more than 20 months,” the New York Times reports (paywall).
• Qualcomm scrapped the agreement right as a July 25 deadline for approval approached, because of a “need to end the uncertainty surrounding it,” the Times says.
• “It has nothing to do with Sino-U.S. trade frictions,” Ministry of Commerce spokesman Gao Feng insisted, referring reporters to China’s anti monopoly enforcement agency, the State Administration for Market Regulation. However, “the market regulator has not commented on the matter recently.”
• But Qualcomm is an American company, and the Financial Times reports (paywall) that when its team of negotiators visited Beijing in May to work out technical issues in the acquisition paperwork, the Chinese “started to say things along the lines of ‘your president embarrassed Liu He’, ‘he offended the Chinese people’, and all that,” according to a person briefed on the discussions.
• The deal’s failure puts a “big red light on any big M&A in the semiconductor industry in the short term,” Geoff Blaber, an analyst at CCS Insight, told the FT, noting that the semiconductor industry is “a huge strategic priority for China.”