Qualcomm extends deadline for NXP purchase offer

Qualcomm has announced that it has extended the offering period of its previously announced cash tender offer to purchase all of the outstanding common shares of NXP Semiconductors. The tender offer is now scheduled to expire on March 7, 2017, unless extended or earlier terminated.

The offer was previously scheduled to expire on February 6.

One condition of the sale was that at least 80% of NXP's outstanding shares be tendered to Qualcomm, with the total approved level only reaching approximately 14.8% at the time of the February deadline.

Under the original October 2016 purchase agreement, Qualcomm offered to purchase all of the issued and outstanding common shares of NXP at a price of US$110.00 per share.

Qualcomm president Derek Aberle recently told Digitimes that once the deal is completed, Qualcomm plans to gradually reduce its reliance on the smartphone market and step into the Internet of Things (IoT), wearable devices and in-car electronics markets.

The deal presents some serious challenges for the combined companies since Qualcomm is a fabless design house and NXP is an IDM that operates more than 10 wafer fabs and packaging/testing plants. Aberle stated Qualcomm has no plans to liquidate NXP's existing fabs and plants after the merger and will let these production lines maintain their original business models. So Qualcomm eventually will become a blended company following its integration with NXP.

In addition, Qualcomm was selling smartphone solutions to a few clients at large quantities, but the clients in the IoT sector are more diverse with even larger quantities. Managing channel distributors and reaching end customers in the IoT sector will be quite different from the smartphone sector, Aberle noted.