By Maude Brulard
THE HAGUE, Netherlands”•US semiconductor maker Qualcomm said Thursday it will buy Dutch rival NXP in a $47-billion mega-deal to extend its footprint into the internet of things and the automobile sector.
In the biggest ever deal in the semiconductor market, the agreement will boost the US company amid falling mobile phone sales and stiff market competition.
According to the unanimous agreement published Thursday, Qualcomm will offer NXP a $110 per share cash deal, 11.5 percent above Wednesday’s market close, the US company said in a statement.
That would value the company, based in the Netherlands but quoted on the New York Nasdaq index, at $47 billion (43 billion euros).
“With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry,” chief executive Steve Mollenkopf said.
“The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale.”
The deal would help Qualcomm “empower customers and consumers to realize all the benefits of the intelligently connected world,” he added.
The new combined company is forecast to have annual revenues topping $30 billion and serviceable markets of $138 billion in 2020, Qualcomm indicated, adding it hoped the deal would be complete by the end of 2017.
Based in the Dutch town of Eindhoven, NXP is a leading maker of chips for the auto industry, as well as for contactless payment systems.
A former division of the Dutch electronics giant Philips, it became independent in 2006 and was floated on the stock market in 2010 for $14 a share.
Turnover in 2015 was $6.1 billion, with net profits of $1.5 billion.
On the Nasdaq, NXP gained 1.6 percent on opening Thursday on the news of its takeover by Qualcomm, which advanced 3.6 percent.
“Qualcomm is predominantly exposed to the smartphone market,” technology analyst Janardan Menon, from Liberum, told AFP.
“This market has slowed down already, with further slowing ahead. They are also losing some share at Apple to Intel, with the business getting more challenging.”
Qualcomm has “virtually no position” in the automotive industry “one of the fastest growing end markets for semiconductors,” he added.
“NXP is the market leader. So by buying NXP they can continue to be a growth story,” Menon said, adding Qualcomm was “one of the few companies with the cash to” snap up the Dutch company.