Qualcomm Ends Bid for NXP

San Diego-based Qualcomm Inc. has dropped its $44 billion bid to purchase rival semiconductor supplier NXP Semiconductors NV after China failed to grant regulatory approval of the deal amid growing trade tensions with the U.S.

The proposed takeover, which was announced in November 2016, had been approved by the U.S., South Korea, the European Union and other regions. China’s approval was critical because it accounted for nearly two-thirds of Qualcomm’s sales last year.

China’s Ministry of Commerce let Thursday’s deadline for approval pass without ruling on the deal. A spokesperson maintains the decision was based on the enforcement of antitrust laws rather than U.S.-China trade issues.

Qualcomm has promised shareholders that it will buy back as much as $30 billion in stock as a result of the failed deal. NXP plans to buy back as much as $5 billion of its stock. Qualcomm also has to pay a $2 billion termination fee to NXP.

Earlier this year, the U.S. blocked Singapore’s Broadcom Ltd.’s takeover bid for Qualcomm. The Trump administration argued that the deal would put the U.S. at a disadvantage in developing 5G wireless technology.