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When Will Qualcomm Inc. Close the $38 Billion Buyout of NXP Semiconductors?

By Anders Bylund - Updated May 5, 2017 at 3:13PM

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The $38 billion merger of these semiconductor titans keeps inching closer and closer to the finish line.

Semiconductor giant Qualcomm (QCOM 4.17%) just re-upped its tender offer for control of automotive computing specialist NXP Semiconductors (NXPI 3.79%). The company also provided updates on how the process is working out.

Are these companies getting any closer to signing on the final dotted line? Let's have a look.

What's new?

According to a Qualcomm press release, 50.3 million NXP shares were tendered to Qualcomm's offer and not withdrawn as of May 1. That works out to 14.9% of NXP's total number of shares outstanding, or 20.2% of the public float.

Here's how the tendered share count compares to the last three renewals:

Month

NXP Shares Tendered

% of Shares Outstanding

May

50.3 million

14.9%

April

54.8 million

16.3%

March

58.0 million

17.2%

February

49.6 million

14.8%

Data source: NXP Semiconductors.

There have been some ups and downs, but no mass migration to either end of the tendered-shares pool. NXP insiders hold roughly 26% of the shares printed, which means a couple of things:

  • The deal has been unanimously approved by NXP's board of directors and executive team, but the shares tendered to Qualcomm's offer so far don't even add up to the insider total. These shares will undoubtedly be tendered when the time is right -- there's just no need to rush into anything.
  • Backing out the insider holdings, the portion of tendered shares has ranged between 20% in February and 23% in March.

Besides the percentages, Qualcomm took this opportunity to serve notice that all the necessary paperwork has been filed in important markets like China, Russia, and the European Union. American regulatory bodies have already waved the deal through, but there are still a few speed bumps left to cross.

To that end, Reuters reports that the European Commission should have a ruling in place by June 9. That body might ask for some concessions before approving the merger, mainly ensuring that Qualcomm rivals will continue to have access to NXP's Mifare smart card technologies.

Chinese and Russian puzzle pieces.

Image source: Getty Images.

What now?

All things considered, the merger looks likely to sail over the last few hurdles. Specific regulations related to Mifare cards might slow things down by a few months, leaving the finish line close to the originally announced "end of 2017" deadline. Otherwise, Qualcomm and NXP might be able to join forces as early as June.

Investors expect nothing less. NXP shares traded as high as $106 per share on Tuesday, just 3.5% below Qualcomm's all-cash $110 buyout price. There is not much room left for exploiting NXP discounts based on uncertainty about the Qualcomm deal at this point.

Don't even worry about doing the paperwork to tender your NXP shares to the Qualcomm offer -- it's probably best just to sell the stock and move that capital elsewhere right now. Qualcomm is always a solid choice if you want to stay invested in NXP for the long haul.

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Stocks Mentioned

NXP Semiconductors N.V. Stock Quote
NXP Semiconductors N.V.
NXPI
$159.32 (3.79%) $5.81
QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
QCOM
$125.10 (4.17%) $5.01

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