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Qualcomm Terminates Acquisition to Pay NXP $2B

Qualcomm Terminates NXP Acquisition, Triples Stock Repurchase ProgramQualcomm Terminates NXP Deal

San Diego-based Qualcomm terminates of the acquisition of NXP Semiconductors effective immediately. In accordance with the terms of the purchase agreement, Qualcomm River Holdings will pay a termination fee of $2 billion to NXP on July 26, 2018.  In connection with this termination, Qualcomm River Holdings has terminated its previously announced cash tender offer to acquire all of the outstanding shares of NXP.  This decision for Qualcomm terminates the NXP deal appears to be the result of Qualcomm’s frustration with not being able to get China to approve the deal after most of the rest of the other countries involved had.

China and the US are currently involved in a trade dispute regarding uneven trade and tariffs each country are putting on each other.  It is also appropriate to note that US President Donald Trump earlier in the year, nixed Broadcom’s attempted hostile takeover of Qualcomm in the interest of national security.  Broadcom was then headquartered in Taiwan, but has since relocated their headquarters to San Jose, California.

Qualcomm also announced today that its Board of Directors authorized a stock repurchase program of $30 billion, which replaces the Company’s existing $10 billion stock repurchase authorization.  After Qualcomm  terminates the NXP deal, it expects to execute the majority of the stock repurchase program prior to the close of fiscal year 2019.

By executing this stock repurchase program, and other previously announced strategic objectives, including its $1 billion cost plan and diversifying into new growth industries, Qualcomm remains well-positioned to drive significant accretion and value for stockholders.

Steve Mollenkopf, Chief Executive Officer, Qualcomm Incorporated, commented, “Our core strategy of driving Qualcomm technologies into higher growth industries remains unchanged.  We will continue to focus on our strong momentum in these growth industries with projected revenues of approximately $5 billion for fiscal year 2018, up greater than 70 percent from fiscal year 2016.  We believe our technology leadership and disciplined execution will drive significant value creation for our stockholders.”

Qualcomm continues to achieve strong growth, accelerated by its expansion and momentum in the areas of IoT, Automotive, RFFE, Compute, and Networking:

  • IoT – Qualcomm continues to lead in IoT, with more than $1 billion in revenue in fiscal year 2017.  The Company has developed an indirect channel to reach more than 9,000 customers through third parties, including more than 25 global distributors.
  • Automotive – Qualcomm is poised to deliver robust connectivity solutions and leading intelligence capabilities for the connected car of tomorrow.  As of July 2018, our backlog of awarded design wins is $5 billion, up from $3 billion in January 2018.
  • RFFE – Qualcomm’s RFFE solution has secured design wins with top-tier smartphone manufacturers in addition to securing non-binding memorandums of understanding with a contract value of $2 billion with leading OEMs: Lenovo, OPPO, Vivo and Xiaomi.
  • Advanced Compute – Qualcomm is redefining the connected PC experience with launches from ASUS, HP and Lenovo, based on the Qualcomm® Snapdragon™ 835 Mobile Platform.
  • Networking – Qualcomm’s technology is driving the industry, leading in Home and Enterprise Wireless Networks and in Mesh Wi-Fi.

Qualcomm terminates the NXP deal, but continues to lead in 5G and expects to see significant short- and long-term opportunities as the next wave of cellular technology dramatically transforms industries. These new opportunities are helping increase the size of Qualcomm’s Serviceable Addressable Market (SAM) to $100 billion. Qualcomm’s leadership in the areas of advanced compute, connectivity and AI, the key technology building blocks of 5G, positions the Company extremely well to secure leadership positions in these new areas.

About Qualcomm

Qualcomm invents breakthrough technologies that transform how the world connects, computes and communicates. When Qualcomm connected the phone to the Internet, the mobile revolution was born. Today, our inventions are the foundation for life-changing products, experiences, and industries. As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio. Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, all of our engineering, research and development functions, and all of our products and services businesses, including, our QCT semiconductor business.

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