NXP Semiconductors NV (NASDAQ:NXPI) Divests Stake in a Chip Design JV based in China
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NXP Semiconductors NV (NASDAQ:NXPI), a leading chip maker in the US, has divested the stake in a joint venture based in China. QUALCOMM, Inc. (NASDAQ:QCOM) is planning to take over NXP in a deal valued at $44 billion but waiting for the nod of antimonopoly regulator of China.
According to a filing with the stock exchange on Tuesday, NXP has divested its 40% stake in the Suzhou ASEN Semiconductors Co Ltd to Advanced Semiconductor Engineering Inc, which is based in Taiwan, in a deal valued at $127 million. The sale reduces exposure of NXP to the Chinese market and eases the competition concerns and gets ready for the takeover by Qualcomm.
Qualcomm has already obtained the nod of eight regulators from the nine to take over NXP. The stake of NXP in Suzhou ASEN Semiconductors Co Ltd helps to win the approval of antitrust authority in China and facilitates the takeover by Qualcomm.
NXP has announced in January 2018 that the transaction date is now extended to April 25. However, the spokesperson of NXP clarified that the extension is not due to takeover but for pruning the assets.
The deal is under active consideration by the Chinese regulators at the time of heightened relations due to the trade war between China and the US.
The US government has already denied permission for the take over of Qualcomm by a Singapore based Broadcom Ltd (NASDAQ:AVGO) on worries that China is getting expertise in 5th Generation Technology and the fears of compromising national security.
A brief information about NXP Semiconductors NV
NXP Semiconductors is engaged in developing solutions for secure connections. NXP is utilizing its expertise in high performance mixed signal electronics to drive innovations in areas like the Internet of Things, portable and wearable, and connected car. The company conducts its business operations in over 25 nations worldwide.
A brief information about Suzhou ASEN Semiconductors Co., Ltd
Suzhou ASEN Semiconductors Co., Ltd is engaged in chip testing/ assembly services. The company is a leader in semiconductor testing/ packaging solutions.