(Reuters) - Qualcomm Inc (QCOM.O), the world’s biggest maker of chips for mobile phones, said on Wednesday it would drop its bid to buy Dutch chipmaker NXP Semiconductors (NXPI.O) after failing to secure regulatory approval from China against a backdrop of widening trade tensions.
FILE PHOTO: A sign on the Qualcomm campus is seen in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake
The company promised to compensate shareholders for the collapse of the $44 billion deal by buying back $30 billion of its own shares and its third-quarter results, also released on Wednesday, topped Wall Street forecasts.
Qualcomm agreed what would have been the largest-ever merger in the semiconductor industry two years ago as it sought alternative sources of growth to an increasingly saturated mobile phone market.
But the deal became embroiled in a trade standoff between China and the United States, who have clashed on issues including ownership of technology and patents.
“We obviously got caught up in something that was above us,” Qualcomm Chief Executive Steve Mollenkopf told Reuters.
“I don’t know if I would conclude anything about our own business, our ability to invest [in China] or partner with Chinese companies. We’re quite pleased with how that’s going and expect it to continue.”
Qualcomm needed the Chinese approval, the last of nine global regulators to be consulted, because the country accounted for nearly two-thirds of its revenue last year.
Barring a last-minute reprieve, the chipmaker said in its results release it would make good on a joint pledge with NXP to call off the merger if had not won Chinese regulatory approval by 2359 Eastern U.S. time on Wednesday.
In Wednesday’s results release, Qualcomm forecast fourth-quarter revenue of between $5.1 billion and
