Qualcomm has agreed to raise the bid to acquire NXP as it hopes to complete the longstanding deal for the Dutch company.
The US chipmaker has increased its offer to acquire NXP to a total of $44bn. This equates to $127.5 per share, a 16% increase on the $110 per share agreement the pair made in October 2016. In addition to the increase in share price, the company has also lowered the minimum tender condition from 80% of NXP’s outstanding shares to 70%.
Qualcomm has said it intends to acquire NXP as part of a way to diversify its various businesses, which currently depends mostly on smartphones as well as the automotive sector.
“The acquisition of NXP will enable us to accelerate our growth strategy,” said Tom Horton, Presiding Director of the Qualcomm. “The Board unanimously believes this is an attractive acquisition at this price for Qualcomm stockholders based on NXP’s recent strong financial performance, the growth in key strategic areas such as Auto and IoT and our high confidence in management’s ability to execute upon the synergy opportunities.”
The chipmaker hopes to expand its business to different sectors with the deal.
NXP’s acquisition value has increased after the results the business has presented from the last few months. These include its recent performance, its market position and confidence in cost synergies valuing $500m at least.
Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated, said, “Qualcomm’s leading SoC capabilities and technology roadmap, coupled with NXP’s differentiated position in Automotive, Security and IoT, offers a compelling value proposition.
“We remain highly confident in our fiscal 2019 Non-GAAP EPS target of $6.75-$7.50, which includes $1.50 per share accretion from the acquisition of NXP. Our integration planning is on track and we expect to realize the full benefits of this transaction for our customers, employees and stockholders.”
Content from our partners
– The chipmaker triumphs in 5G trial
– LG teams up with the company to expand autonomous cars
– Samsung the latest to partner with the company
The US chipmaker has also agreed to finance the bid with cash on hand and a new debt. Furthermore, boosting the NXP offer also aims to give Broadcom’s $146bn takeover attempt of Qualcomm a wide berth.
Eight of the required nine government regulatory bodies around the world have already given anti-trust clearance for the acquisition of NXP, with China as the final remaining city. Once completed, the revised agreement to acquire the company will be extended to the end of the day on March 5th.
