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Business deals

China shifts blame to Qualcomm for collapse of NXP deal

Competition authorities say they were willing to negotiate until October

Qualcomm's booth at the China International Big Data Industry Expo in Guiyang, Guizhou Province, China, in May.   © Reuters

TOKYO -- The Chinese government on Friday blamed U.S. chipmaker Qualcomm for the collapse of its takeover bid for Dutch rival NXP semiconductors, saying the U.S. company decided to terminate the merger talks despite a Chinese offer of further consultation.

"The State Administration for Market Regulation hoped to continue to communicate with Qualcomm so that a suitable solution would be found to the problem within the review period," said the organization, one of the main competition bodies in China, in a statement posted on its website.

The agency "regrets" but "respects" Qualcomm's decision to terminate the negotiations with NXP, the statement added.

Qualcomm had set the deadline of July 25 to gain approval from Chinese regulators. The Chinese said, however, that they had given Qualcomm till Oct. 14 to address their concerns, without specifying what those concerns were.

The statement argued that the combination would have adverse effects on the market competition and that the Chinese regulators treat all companies fairly and equally in keeping with the Chinese anti-monopoly law. 

The San Diego-based chipmaker announced the termination of the deal Thursday and a payment of $2 billion in termination fees to the Dutch company.

The breakdown came amid an escalating trade dispute between the U.S. and China over the massive bilateral trade imbalances, lack of access to the Chinese market, and China's apparent attempt to dominate global technology industries.

The Qualcomm deal had already been approved by eight other regulatory bodies, but still required endorsement of the Chinese competition authorities.

The breakdown was widely portrayed in the U.S. as Beijing's attempt to prevent Qualcomm from expanding its lead in the field of semiconductors, a segment where China is also keen to gain market share.

The latest decision stands in contrast to the approval China gave to another deal involving a major semiconductor company -- Toshiba Memory of Japan -- a top flash memory maker which was taken over by a consortium led by U.S. buyout firm Bain Capital earlier this year. The deal faced tough scrutiny, but eventually received clearance, from the Chinese authorities.

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