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Qualcomm-NXP deal still waiting for China nod: sources
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China is yet to approve U.S. chipmaker Qualcomm Inc’s proposed $44 billion acquisition of NXP Semiconductors, three people close to the talks said, dismissing an earlier media report that said Beijing had already greenlit the deal. (Reuters)
 
NXPI is a rather interesting name. It itself has strong fundamentals and standalone should be worth around $100-$120. Due to the merger, the stock missed the sector rally and stuck in a tight range. With the breakup fee added, the current share price is inexpensive. If China blocks the deal, the stock will tank as merger investors exit but should gradually recover when fundamental investors rotate in. Compared to other merger stocks, the downside risk is not as high, in my view.

China can't politically approve it until ZTE gets more certainty on the trumpian deal. It can block it but wouldn't look too good when 7/8 countries have approved. Path of least resistance is putting on-hold until the companies kill the deal which NXPI set a July deadline.

I am adding a few hundred shares everyday, as I expect the merger-busting to remove a valuation overhang and the downside to be short-lived.
 
silveredge said:
I expect the merger-busting to remove a valuation overhang and the downside to be short-lived.
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I agree
Would love to get another shot at mid-low $90’s buys again.
And will buy even more QCOM than I already have if it sells off too.

I still think the deal gets approved, but hoping it doesn’t so I can get both cheap.
 
When the deal was announced in oct 2016, NXP was at 80ish. The sector (MCHP, STM) rallied 60-100%, while NXP rose about 30% due to the tender. Merger going through or not is anyone's guess, unless you have access to the chinese govnt mind, but believing the share is worth holding at current price even if the deal doesn't go through is key reason for my accumulation. Breakup fee of $2bn likely used for buyback should add $3-5 per share.
 
Clubber Lang said:
I agree
Would love to get another shot at mid-low $90’s buys again.
And will buy even more QCOM than I already have if it sells off too.

I still think the deal gets approved, but hoping it doesn’t so I can get both cheap.
More...

I like the QCom's dividend yield of 4%, but getting a view on its future earnings is too much effort for me.
 
Eight countries have already given their approval. However, China has been holding tight to its vote, possibly due to the trade-related tensions between Washington and Beijing.

Analysts expect Qualcomm’s licensing business to show a solid growth, because of increased 3G and 4G device adoption. However, recent government investigations into the business model and the Apple lawsuit against Qualcomm’s business practices have increased the possibility of negative effects on royalty revenue. Qualcomm may be able to withstand these inquiries and maintain adequate royalty rates.
 
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