How China slowed the merger of the chip giant

This makes Mollenkopf one of the first and most important victims of the trade war between the world's two largest economies, China and the United States. In the end, only the release of the Chinese authorities from competition was missing for the recovery. Eight other antitrust authorities had already rejected the agreement. But Beijing's approval was missing.

Mollenkopf could not ignore the Chinese. His business – and that of NXP – lies and falls with sales in the vast country. Until recently, the boss of Mollenkopf and NXP, Rick Klemmer, had hoped that the Chinese would still move. For the general manager of Qualcomm had the deadline to complete the case, extended in the spring.

But he had believed for the last time that "the current geopolitical environment will change." Thus, the self-imposed date pbaded on July 25 and he had to give up.

In March the case became a political issue

Even advocates like US Treasury Secretary Steven Mnuchin and Secretary of Commerce Wilbur Ross could not soften Beijing – maybe the only one. agreement failed because of them. Because no later than mid-March, the planned acquisition had become a political issue. While US President Donald Trump has prevented Qualcomms' acquisition of $ 117 billion from Singapore-based competitor Broadcom.

The rationale for the intervention was that Qualcomm's technology was important to the security of America. Thus, the company was almost the national champion in the competition with China for supremacy in the next generation of 5G mobile radio.

At the end of March, the trade dispute between the United States and China intensified. Trump threatened Beijing with punitive tariffs of 25 percent on Chinese goods worth $ 50 billion. China has announced that it will take the appropriate countermeasures. While a Washington faction focused primarily on reducing the trade deficit, others should have understood the conflict as a battle for technological supremacy.

In early July, punitive tariffs came into effect and China responded to them in the same proportions. As a result, Trump has threatened other $ 500 billion import duties. Since China only imported $ 130 billion worth of US goods last year, it should use other methods to do the same thing as Trump's strike. What these methods may look like, Qualcomm learned.

The treatment of US authorities by the Chinese network equipment supplier and mobile phone manufacturer ZTE has also been of great help to the group. Americans have banned the company from buying components of their land. That would have been over: 70% of all ZTE smartphone chips come from Qualcomm, others from the US rival Intel. At the last moment, ZTE agreed with the Americans a fine of $ 1 billion and was allowed to continue.

Previously, Trump personally campaigned for ZTE in June. Observers said President Xi Jinping would like to thank Qualcomm for an intervention. But that did not happen.

Everything is a matter of antitrust law

In China, it was said that the antitrust authorities initially intended to approve the agreement. Then the commercial dispute was raised and the ZTE case. A spokesman for the Ministry of Commerce denied this. Everything is just a matter of antitrust law. He did not give any other information.

The failed acquisition is a failure for Qualcomm and NXP. It was "regrettable" that it did not happen, said NXP boss Clemmer. The two companies would have complemented each other ideally. Qualcomm is the world's leading supplier of mobile chips. NXP leader in semiconductors for cars. In autonomous vehicles, the know-how could have been perfectly combined.

Throughout the flea industry, managers are now wondering if other acquisitions will be possible in the future. There are huge hurdles in their two main markets, China and the United States.

He was "very disappointed," said Finance Minister Mnuchin. The US government wants nothing more than the fair treatment of American companies.

Mollenkopf does not want to rely on this and abstains from buying for the moment. Instead, Qualcomm will buy $ 30 billion in shares, he said.