NXP Semiconductors NV is up more than 10% Monday following a Bloomberg report that China has restarted its review of Qualcomm’s proposed $44 billion acquisition of the company.
Qualcomm previously announced a bid for the semiconductor maker in October 2016, but the deal had been put on hold due to uncertain trade conditions between China and the US. China’s Ministry of Commerce will consider Qualcomm’s offered solutions to protect local Chinese companies as the merger may allow Qualcomm’s patent licensing business to cut into other fields. Though Qualcomm and NXP Semiconductors are not Chinese companies, their multinational status combined with their large presence in the country gives China a say the fate of the deal.
The review of the acquisition comes at a time when President Donald Trump has taken hard stance on international trade, especially on China. The US Commerce Department had ordered US companies to cease business with ZTE after the company violated Iran sanctions and failed to comply with a guilty plea agreement. Sunday night, Trump hinted at a willingness to improve relations.
“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” he tweeted. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”
NXP Semiconductors NV is down about 8% this year.