According to sources, Qualcomm is acquiring NXP Semiconductors in a USD 30 Billion deal. The deal is expected to be announced sometime early next week. NXP Semiconductors is a Netherlands based global semiconductor manufacturer entity. The company has over 45,000 employees in various capacities in over 35 countries and at the last count, generated revenues well in excess of 6 Billion. It is also the fifth-largest non-memory semiconductor supplier globally.
Qualcomm on the other hand is a global leader in all sorts of electronics and this acquisition will prove to be very benificial for the company and strenghten its current standing. If things actually materialize, this deal will mark further consolidation to the Semiconducter space which has already seen a lot of M&A’s in recent past. Recently, Softbank acquired ARM in a USD32 Billion deal. NXP Semiconductors itself had merged with Freescale Semiconductor in a deal amonting to USD 40 Billion last year.
Sources say that, NXP asked Qualcomm for a USD 120 price per share, in order to consider an acquisition. Eventually, the companies agreed to settle upon USD 110 per share. Considering the per share price and NXP’s market cap, the deal may have a value somewhere between $35-$37 Billion.
Qualcomm already has a well established position in mobile. By this strategic move from a business standpoint, it will also get a boost in automotive and identification domains. Qualcomm gets the bulk of its revenue from chip sales but most of its profit comes from wireless patents it licenses to the mobile industry. Qualcomm ranked third in terms of revenue among global semiconductor companies in 2015, while Eindhoven, Netherlands-based NXP ranked No. 7, according to research firm IHS.