Qualcomm pays $2bn as it kills plans to buy NXP but board authorises $30bn stock repurchase, insists strategy unchanged
Qualcomm Inc. has terminated its planned acquisition of NXP Semiconductors N.V. by Qualcomm River Holdings B.V., an indirect wholly owned subsidiary.
Jeremy Cowan reports that at the same time, Qualcomm’s board of directors has authorised a stock repurchase programme of US$30 billion (€25.78 billion), replacing the company’s existing plans for a $10 billion (€8.59 billion) stock repurchase.
In accordance with the terms of the purchase agreement, Qualcomm River Holdings will pay a termination fee of $2 billion (€1.72 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.
Steve Mollenkopf, Qualcomm Inc.’s chief executive officer 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 (€4.30 billion) for fiscal year 2018, up greater than 70% from fiscal year 2016. We believe our technology leadership and disciplined execution will drive significant value creation for our stockholders.”
Mollenkopf points to the company’s “strong growth”, accelerated by expansion in the Internet of Things (IoT), a $5 billion (€4.30 billion) pipeline of orders in automotive connectivity, radio frequency front end (RFFE) with smartphone design wins for Lenovo and Xiaomi, advanced computing and home and enterprise wireless networking sectors.