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Trade war

China now 'open' to Qualcomm-NXP deal, White House says

Beijing changes tune on $44bn acquisition as trade war eases

Chinese authorities previously failed to approve Qualcomm's bid to acquire NXP.   © Reuters

PALO ALTO, U.S. -- Chinese President Xi Jinping said he is "open to approving" Qualcomm's purchase of Netherlands-based NXP Semiconductors should it be presented to him again, a deal essentially killed by Beijing, according to a White House statement following Xi's meeting with U.S. President Donald Trump on Saturday.

The old $44 billion deal had gotten the green light from European, American and Japanese antitrust authorities, only to fall through after China failed to approve it before the companies' July 25 deadline.

"We obviously got caught up in something that was above us," Qualcomm CEO Steve Mollenkopf told Reuters at the time, referring to the mounting tensions between the U.S. and China over their trade imbalance. But Xi and Trump agreed on Saturday to a 90-day truce on additional tariffs as they seek ways to de-escalate tensions in their damaging trade war.

Whether the companies remain interested in the deal is unclear. Qualcomm paid a $2 billion breakup fee to NXP soon after the missed deadline and launched a $30 billion stock repurchase program. It has already begun buying back shares.

Qualcomm has not responded to Xi's comments.

The U.S. semiconductor company pursued NXP, known for its strength in automotive chips, to branch out beyond a stalling smartphone field that has only lost steam since the duo agreed to the deal in 2016. Xi's comment could yet breathe new life into the acquisition, which would significantly alter the balance of power in the semiconductor sector.

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