What happened

Shares of NXP Semiconductors (NASDAQ:NXPI) gained 19.5% in 2017, according to data from S&P Global Market Intelligence. Given the buyout bid Qualcomm (NASDAQ:QCOM) made the chip maker in the fall of 2016, last year's gains really should have been capped at 12%. It didn't work out that way.

A young investor hunches over his laptop, trying to make sense of NXP's extra-large gains in 2017.

Image source: Getty Images.

So what

Qualcomm's takeover offer stands firm at $110 per share, to be paid in cash and with all the financing set up long ago. But regulators from China and the European Union are taking their sweet time to approve the deal. Meanwhile, impatient activist investors, led by investment firm Elliott Advisors, have been pushing for a larger price tag based on the stock price gains they feel NXP would have posted if there hadn't been a firm buyout price to consider.

So NXP's share price now stands more than 7% above Qualcomm's offer, and holders of less than 2% of NXP's shares had officially accepted Qualcomm's tender offer at the latest count.

Now what

The companies originally wanted to close their merger by the end of 2017. The target has shifted to "early 2018" now, with the current tender offer expiring at the close of business Friday. I'd bet Qualcomm will extend the offer once again, assuming that Chinese and European regulators haven't approved the deal by then.

When that happens -- be it in January or even later -- Qualcomm will most likely need to adjust its cash offer and agree to some other changes. In particular, the European Commission worries about Qualcomm's power to shut down the competition in key markets where NXP holds patents that are central to industry standards, such as near-field communication. I can't wait to see exactly what terms Qualcomm will swallow in order to get its hands on NXP's portfolio of automotive computing products -- and how this deal's final particulars could affect Broadcom (NASDAQ:AVGO) and its own attempt to swallow Qualcomm in a hostile takeover.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.