Qualcomm has officially announced today that it has reached a definitive agreement to acquire NXP Semiconductors. The agreement allows Qualcomm to purchase all issued and outstanding common shares of NXP for $110 per share, which gives NXP a total enterprise value of around $47 Billion. The acquisition has been rumored for a while, and Qualcomm has now made it official.
NXP's acquisition will help broaden Qualcomm's scope as areas of focus under NXP were primarily related to the automotive industry. This will reduce the dependence of the parent company on smartphone chips, as Qualcomm is seeing rising competition from Chinese and other Asian manufacturers in this area, which is likely to have its toll on profit margins in the future. The combination of Qualcomm and NXP is expected to have an annual revenue totaling more than $30 billion.
It is not all money though. Qualcomm will also see benefits in the form of additional expertise in the automative silicon market as well as the acquisition of sales channels, along with the sharing of NXP's portfolio of security solutions which in turn will complement Qualcomm's IoT solutions.
The acquisition transaction is expected to be complete by the end of 2017. While the tender offer is not subject to any financing conditions, the transaction is subject to regulatory approvals in various jurisdictions.
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