Qualcomm announced that it's received regulatory clearance from the European Commission and the Korea Fair Trade Commission for its proposed takeover of NXP Semiconductors. The competition regulators cleared the deal after Qualcomm agreed to separate some of NFC activities from the business. Qualcomm still needs approval in China, as well as backing from NXP shareholders, to complete the takeover first announced over a year ago.
The conditions for European and Korean approval were for Qualcomm to exclude certain NFC patents from the transaction and ensure that NXP licenses those patents to third parties. Qualcomm also committed not to assert the NFC patents it will acquire from NXP and maintain interoperability between Qualcomm's baseband chipsets and NXP's NFC chips and rivals' baseband chipsets and NFC chips. Qualcomm also will continue to offer a licence to the Mifare ticketing platform on terms commensurate with those offered by NXP today.
Qualcomm first announced the takeover of Netherlands-based NXP, the former Philips Semiconductors, in October 2016 for USD 47 billion. In June 2017, the European Commission started an in-depth competition investigation. The EU regulator was concerned that Qualcomm could try to exclude rivals from the market by bundling NXP's NFC chips with its own smartphone processors, and the two would also have a very strong position in essential patents for NFC. In addition, there was the risk that Qualcomm could abandon the Mifare system developed by NXP, which is used by many public transport operators in Europe.
Qualcomm still needs to convince NXP's shareholders to back the takeover. The company's public bid for NXP has been extended repeatedly, as still only a very small share of shareholders have accepted the offer.
