Mike Wuerthele
The deal, if approved by regulators, will put the one-time manufacturer of the motion co-processor and the current supplier of the Apple Pay near-field communication chipset under Qualcomm's control.
Besides just supplying the NFC and authentication chips for Apple Pay in the iPhone and Apple Watch, NXP supplies a number of solutions to automotive vendors for automotive "infotainment" displays, as well as a variety of wired and wireless networking chipsets.
Qualcomm currently supplies Apple with the cellular modem found in some models of iPhone 7, with Apple choosing to use an Intel-produced modem to diversify its supplier base, and not be reliant on any one supplier for key components.
A subsidiary of Qualcomm will tender an offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, representing a total enterprise value of approximately $47 billion. The offer has been unanimously approved by the boards of directors on both companies.
The move appears to be a strategic one by Qualcomm to widen its customer base. According to Qualcomm's own financial data, Samsung and Apple are responsible for 50% of the company's consolidated revenue, and a manufacturer shift by either away from its products would have profound effects on earnings.
The combined company is expected to have annual revenues of more than $30 billion. Neither company is expecting any regulatory resistance to the deal.
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13 Comments
Qualcomm's market cap is $100 billion, and it has a huge franchise. Paying almost half that amount for NXP suggeste that Qualcomm expects mobile payments and other NFC applications to become a dominant technology in coming years.
Speaking of large acquisitions...
Apple would acquire Netflix for around $70B and it would complete Apple TV as a living room strategy and it would put the ATV ecosystem of apps front and centre as a result. $9.99 per month, $6.99 on Apple TV. I'd go for it if I were Apple.
There's no one who understands new content like Netflix and no one who has their distribution channel. It's a lot of money but their new content lineup will become huge over the next 10 years. They'll own streaming. Snag them while you can, I say.
I've made similar comments to this a few times, but let's face it this is what Apple and missing for their living room product. You don't a third party control the fate of your destiny. They need to own this.
~2020, Netflix rebrand: Apple TV