Qualcomm Inc. (NASDAQ:QCOM) may get approval from China for its $43 billion takeover of NXP Semiconductors NV (NASDAQ:NXPI) if the American government decides to lift a seven-year ban on the Chinese telecoms giant, ZTE Corp. The company officials are hopeful of meeting the antitrust regulators in Beijing this week as it will give a final try to push and secure the clearance for the NXP acquisition.
Qualcomm Officials To Talk With Chinese Regulators
The antitrust regulator from China has already cleared all the factual investigations and seems to be satisfied with the offerings from Qualcomm. According to reports, only procedural issues are yet to be solved although the senior officials have already given approval to the deal proposed almost 18 months ago. The approval is expected at any time soon. Importantly, there is nothing wrong with the proposal of Qualcomm and China is in favor of it but the rising trade tensions between the U.S.-China are proving to be a hurdle in the progress of broader bilateral talks.
Reports indicate that eight out of nine regulators have already given the clearance with only the one from China pending. The officials of Qualcomm are most likely to meet the regulators in China prior to the arrival of the U.S. Commerce Secretary Wilbur Ross in the country. According to a source recently a meeting was held between the State Administration for Market Regulations (SAMR) officials and a team of the San Diego-based firm and reportedly had productive talks.
The regulators in China have expressed concerns that the merger of NXP with Qualcomm will lead to crowding of domestic businesses in the fields related to mobile payments. NXP provides services and technology required for mobile payments.
China Wants US To Resolve Ban On ZTE
China wants the US to resolve its ban on ZTE. The local telecom company was banned last month from buying the U.S. technology components for seven years as it was found that the Chinese company broke an agreement with the US violating America’s sanctions against North Korea and Iran. However, just a few days ago, the Trump administration stated that it has officially reached a deal with the ZTE Corp. The statement says that the Chinese telecommunications company can start its business operations in America if it pays a fine of $1.3 billion and makes some changes in its management.