Qualcomm on Tuesday announced it has agreed to strengthen its tender offer for the outstanding stock of Dutch tech firm NXP Semiconductors to $127.50 in cash per share, up from $110 agreed in late 2016. The move represents a 15.9-percent increase of the original deal valued at approximately $39 billion, upping the overall transaction to nearly $45 billion. The San Diego, California-based tech giant also lowered the basic requirements of its tender offer, vowing to complete the acquisition if it’s able to purchase as little as 70-percent of NXP shares, whereas the initial agreement placed the threshold at 80-percent.
Qualcomm said the revised offer is meant to illustrate the changes observed in the relevant markets over the course of the last fourteen months since the merger proposal was first announced. Today, the company is even more confident that it’s able to leverage various cost synergies created through a consolidation with NXP to add hundreds of millions of dollars to its bottom line, whereas NXP’s revenue is also on the rise and showing even more long-term promise, having been boosted 20-percent in 2017. Combining the assets of the duo would generate additional synergies in the Internet of Things, automotive, and networking segments due to their recent investments in those sectors which the new offer accounts for, Qualcomm said. The revised bid also has the approval of Elliott Advisors, a hedge fund that previously advocated against Qualcomm’s bid by claiming it undervalues the Eindhoven-based company. Qualcomm entered into binding agreements with Elliott and eight other stockholders who own over 28-percent of NXP’s outstanding stock, making its tender offer threshold relatively easy to be surpassed. An approval from China‘s antitrust watchdog is the last legal necessity for the successful conclusion of the deal.
The move makes Qualcomm’s merger with Broadcom much more unlikely, complicating the already convoluted antitrust implications of such a tie-up, in addition to adding more credence to the company’s claims that Broadcom’s historic bid still undervalues its assets by a significant margin. Qualcomm’s inability to complete the NXP merger in a timely manner may be what prompted Broadcom to attempt a hostile takeover in the first place but the Singapore-based semiconductor giant will have a hard time completing the largest merger proposal in the history of the tech industry should Qualcomm successfully absorb NXP and the majority of its intellectual properties.