Trade tensions between are threatening to stifle QUALCOMM, Inc. (NASDAQ:QCOM)’s plans to purchase NXP Semiconductors NV (NASDAQ:NXPI). The is embroiled in the crosshairs of the trade tensions with the Chinese government holding back on regulatory approval that is need to give the $44 billion deal the green light.
On the verge of its completion
The deal was already on the verge of being sealed and had been approved by eight out of the night relevant regulatory bodies. It is only the Chinese authorities that are holding it back. However, there has been some progress made in the U.S.-Chinese trade talks which presents some hopes of the deal sailing through.
The approval from China will mainly depend on the progress made in the negotiations between the two countries. Chinese officials met their U.S counterparts in Washington this week for the second round of talks. The first round, which happened in Beijing at the start of this month made very little progress.
Each party asking for billions of dollars
In the recent weeks, both countries have maintained hardline stands with each side proposing for tens of billions in tariffs. This has ignited fears of a trade war which could hurt the international supply chains. The acquisition of NXP by Qualcomm has found itself in the middle of these trade tensions.
NXP shares went up on Monday following media reports that the Chinese government had started reviewing the deal. The report indicated the government had tasked the commerce ministry to speed up the review. In what could be interpreted as a thaw in trade relations, U.S President Donald Trump on Sunday announced that he would help ZTE Corp, a Chinese telecom equipment maker to get back into business. The company was severely hurt by a U.S ban.
However, sources close to the matter have indicated that there is no change in the review process which has been ongoing since Qualcomm initiated talks for the deal in April. There are no signs that point to any progress in the talks that could offset the deal to its completion.
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