Qualcomm to meet China regulators in push to clear $44 billion NXP deal: Sources

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Lei Jun, the CEO of Chinese smartphone maker Xiaomi (front right), shakes hands with Qualcomm CEO Steven Mollenkopf on November 9, 2017, after signing a memorandum of understanding during a ceremony attended by President Donald Trump (obscured) and China’s President Xi Jinping (back right) at the Great Hall of the People in Beijing.

Qualcomm is expecting to meet this week in Beijing with China’s antitrust regulators in a final push to secure clearance for its proposed $44 billion acquisition of NXP Semiconductors, three sources told Reuters.

The acquisition has been caught in the crosshairs of rising U.S.-China trade tensions, with sources saying an approval would depend on the progress of broader bilateral talks. The deal has got a nod from eight of the nine required global regulators, with Chinese clearance the only one pending.

Qualcomm is likely to meet Chinese regulators before U.S. Commerce Secretary Wilbur Ross arrives in China on Saturday, the sources briefed on Qualcomm’s discussions said.

A Qualcomm team and officials from the State Administration for Market Regulation (SAMR) met in Beijing on Friday and had “productive” talks, the sources said.

The San Diego-based firm is now “cautiously optimistic” the deal will go forward, one of the sources said, amid recent indications of a thaw in U.S.-China trade tensions that has seen both sides propose tens of billions of dollars in tariffs.

On Friday, the Trump administration said it had reached a deal that would put ZTE Corp. back in business after the Chinese telecommunications company pays a $1.3 billion fine and makes management changes.

Resolving the ZTE sales ban has been of chief importance to China’s leadership. The firm was banned in April from buying U.S. technology components for seven years after breaking an agreement it reached for violating U.S. sanctions against Iran and North Korea.

“It feels as though it’s getting close to the end,” said the source quoted above.

Qualcomm did not immediately reply to an email from Reuters seeking comment on Sunday, while calls to NXP went unanswered outside regular business hours.