At long last, microchip giant Qualcomm (NASDAQ:QCOM) is inching closer to finalizing that elusive $44 billion acquisition of Dutch peer NXP Semiconductors (NASDAQ:NXPI).

The companies saw their application for approval by Chinese regulators expire two weeks ago, promptly refiling and extending every possible deadline to keep the dream alive.

Man in white shirt uses his hand to stop the last domino from falling.

Will Beijing let that last domino fall? Image source: Getty Images.

Earlier this week, both NXP and Qualcomm shares jumped as an analyst speculated that the regulatory body was under political pressure to end its review -- preferably in a positive direction. Thursday night, another analyst saw a different megamerger getting that coveted Beijing rubber stamp, arguing that an approval for NXP plus Qualcomm would be the next logical step. The two stocks soared again.

And today, we're moving past analyst speculation and getting down to insider actions.

According to The Wall Street Journal, a Beijing government official said that the merger's chances of approval look "more optimistic now," following Toshiba's go-ahead for selling its chip operations to a private investor consortium for $18 billion. The lead investor there is all-American equity firm Bain Capital. On top of that, two American companies with substantial business interests and operations in China were given the last Chinese blessing this week, clearing the way for another $8.4 billion tech merger that Beijing could have stopped dead in its tracks.

So, maybe the recent games of international politics are winding down, allowing China's regulatory bodies to consider each case on its actual merits instead.

Where is this deal going next?

Beijing has made it clear that the Chinese government would like to establish a healthy base of all-Chinese chip suppliers, hoping to replace local companies' dependence on outsiders like Qualcomm and NXP. But that ambitious goal is still a long way away, which means Chinese businesses of all sizes can benefit when American chip companies improve their product portfolios.

From that angle, China might want to give the Qualcomm/NXP merger a quick thumbs-up at this point rather than tying up two important chip suppliers in needless uncertainty. The regulators should probably load the approval up with demands for big concessions and promises of fair competition, taking the European Commission's deal conditions a step further. I get the sense that Qualcomm would be willing to bend over very far backwards to get this acquisition done, since NXP would give the company an immediate grip on the exploding market for automotive computing.

But government officials speaking to a Western newspaper is still a few notches below a final approval. That's why NXP shares continue to trade more than 13% below Qualcomm's offer of $127.50 per share, even now. The drama continues...

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