Microchip Technology Inc. (NASDAQ:MCHP) has finally received an antitrust clearance from the China’s Ministry of Commerce (Mofcom) for completing its pending acquisition of Microsemi Corporation (NASDAQ:MSCC). The authorities from other countries including the Japan Fair Trade Commission, the Austrian Federal Competition Authority, the Philippine Competition Commission and the German Federal Cartel Office have also offered antitrust clearances.
Merger Formalities To complete In Late May/Early June
However, the clearance by the Chinese authority was the most awaited and a moment of rejoicing for the leading provider of microcontroller, mixed-signal, analog, and Flash-IP solutions because of the strained business relationship between the U.S. and China. Interestingly, trade analysts believe that the approval from Mofcom is somehow influenced by the decision of the U.S. President Donald Trump to rethink about the penalties levied on the Chinese company ZTE Corp. The Hong Kong-based company is facing penalties for flouting U.S. sanctions on trade with Iran.
Although the merger formalities are expected to complete anytime in late May or early June of the current year, the company is still waiting for approval from the Microsemi stockholders and the Taiwan Fair Trade Commission. Microchip will require the period for getting remaining regulatory approvals and satisfying the closing conditions. Incidentally, this approval is the first after the major Broadcom-Brocade deal that took place in August last year between America and Singapore. Both Microchip and Microsemi confirmed the $8.35 billion acquisition deal almost three months ago and its approval by both the countries indicates that the trade tensions between the two countries are slowly easing.
US-China Trade Tensions May Melt Soon
Several major deals are getting affected due to the trade tension. A $44 billion mega-deal between NXP Semiconductors NV (NASDAQ:NXPI) and QUALCOMM, Inc. (NASDAQ:QCOM) is still to complete due to the brewing trade tension between the two countries. The deal was stuck between the two companies in October 2016.
According to Chaim Siegel, the Elazar Advisors analyst, the trade tension between the US and China seems to be melting, especially after President Donald Trump’s meeting with the North Korean leaders in June. He said that since June last year and now, the U.S. has tried to improve the terms of negotiation between the two countries due to which US-China relations are now moving forward.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.