Qualcomm Ended NXP Acquistion After Failing To Secure Chinese Approval (cnet.com)

hackingbear writes: Qualcomm officially terminated the deal to buy Dutch semiconductor giant NXP after failing to get a decision from regulators in China by its deadline. It must now shell out a previously agreed upon $2 billion termination fee. The Chinese market accounts for 30% of Qualcomm's revenue. China's refusal of the approval can also be a retaliation against an $1.4 billion penalty against ZTE imposed by the U.S. Department of Commerce over technicalities of ZTE's violation of Iran sanctions, a move viewed by China as a U.S. excuse to launch a trade war. "It's a reminder that trade wars are maybe not that easy to win," says Steven Roach of Morgan Stanley. "And China has a lot of ammunition up its sleeve." Roach urged the Trump administration to understand that the U.S. and China "need each other," saying low-price Chinese imports are needed to "make ends meet" for cash-strapped Americans. Separately, in a hearing at the Office of United States Trade Representative for imposing additional tariffs on Chinese imports due to the alleged intellectual property theft by China, an accusation that the U.S. itself had committed, out of some 61 figures from the country's chemical, electronics, and solar energy sectors, only six expressed their support for the move.

Comments

I've waited years for this moment!

[Anonymous Coward]

A few years ago, while browsing around the library downtown, I had to take a piss. As I entered the john a big beautiful all-american football hero type, about twenty-five, came out of one of the booths. I stood at the urinal looking at him out of the corner of my eye as he washed his hands. He didn't once look at me. He was "straight" and married -- and in any case I was sure I wouldn't have a chance with him.

As soon as he left I darted into the booth he'd vacated, hoping there might be a lingering smell of shit and even a seat still warm from his sturdy young ass. I found not only the smell but the shit itself. He'd forgotten to flush. And what a treasure he had left behind. Three or four beautiful specimens floated in the bowl. It apparently had been a fairly dry, constipated shit, for all were fat, stiff, and ruggedly textured.

The real prize was a great feast of turd -- a nine inch gastrointestinal triumph as thick as a man's wrist.

I knelt before the bowl, inhaling the rich brown fragrance and wondered if I should obey the impulse building up inside me. I'd always been a heavy rimmer and had lapped up more than one little clump of shit, but that had been just an inevitable part of eating ass and not an end in itself. Of course I'd had jerk-off fantasies of devouring great loads of it (what rimmer hasn't), but I had never done it. Now, here I was, confronted with the most beautiful five-pound turd I'd ever feasted my eyes on, a sausage fit to star in any fantasy and one I knew to have been hatched from the asshole of the world's handsomest young stud.

Why not? I plucked it from the bowl, holding it with both hands to keep it from breaking. I lifted it to my nose. It smelled like rich, ripe limburger (horrid, but thrilling), yet had the consistency of cheddar. What is cheese anyway but milk turning to shit without the benefit of a digestive tract? I gave it a lick and found that it tasted better then it smelled. I've found since then that shit nearly almost does.

I hesitated no longer. I shoved the fucking thing as far into my mouth as I could get it and sucked on it like a big brown cock, beating my meat like a madman. I wanted to completely engulf it and bit off a large chunk, flooding my mouth with the intense, bittersweet flavor. To my delight I found that while the water in the bowl had chilled the outside of the turd, it was still warm inside. As I chewed I discovered that it was filled with hard little bits of something I soon identified as peanuts. He hadn't chewed them carefully and they'd passed through his body virtually unchanged. I ate it greedily, sending lump after peanutty lump sliding scratchily down my throat. My only regret was the donor of this feast wasn't there to wash it down with his piss.

I soon reached a terrific climax. I caught my cum in the cupped palm of my hand and drank it down. Believe me, there is no more delightful combination of flavors than the hot sweetness of cum with the rich bitterness of shit.

Afterwards I was sorry that I hadn't made it last longer. But then I realized that I still had a lot of fun in store for me. There was still a clutch of virile turds left in the bowl. I tenderly fished them out, rolled them into my hankerchief, and stashed them in my briefcase. In the week to come I found all kinds of ways to eat the shit without bolting it right down. Once eaten it's gone forever unless you want to filch it third hand out of your own asshole. Not an unreasonable recourse in moments of desperation or simple boredom. I stored the turds in the refrigerator when I was not using them but within a week they were all gone. The last one I held in my mouth without chewing, letting it slowly dissolve. I had liquid shit trickling down my throat for nearly four hours. I must have had six orgasms in the process.

I often think of that lovely young guy dropping solid gold out of his sweet, pink asshole every day, never knowing what joy it could, and at least once did, bring to a grateful shiteater.

Shot the economy in the ass.

[Anonymous Coward]

Trump shot the economy in the ass. And also consider that we are at the top or coming off of a top of the economic cycle - depending on the economist you talk too.

So, if this horseshit keeps going on, the next Presidential term (or even this one) is going to see a bad recession - as apposed to a nice low amplitude slow-down.

I love how he's making America great again!

Re:Shot the economy in the ass.

[Anonymous Coward]

So, if this horseshit keeps going on, the next Presidential term (or even this one) is going to see a bad recession - as apposed to a nice low amplitude slow-down.

They'll blame it on the Democrats, and their slow-mutant "base" will eat it up as usual.

It's OK

[Anonymous Coward]

We can cover their losses with some depression era laws somehow.

Trump Knows Economy

[gavron]

Nagh. He doesn't.

Trade wars aren't things you "win" and all you do is cost your own people more.

Qualcomm isn't even a US firm... but now they're paying the price for one orange hubris.

E

Re:Trump Knows Economy

[Anonymous Coward]

Excuse me but Qualcomm most certainly is a US firm.

What i do not understand is why the merger requires Chinese approval. On the other hand, i just don't care that much to find out. It's not like i'll ever have that problem.

Not to mention Qualcomm is an asshole of a company.

Re:Trump Knows Economy

[ShanghaiBill]

What i do not understand is why the merger requires Chinese approval.

Both Qualcomm and NXP have operations in China, and China is their biggest market. Nearly all large mergers require approval of the "Big 3" (US, EU, China).

Qualcomm's investors seem to agree with China that this merger was a bad idea, since Qualcomm's stock rose on the announcement of the cancellation.

Re:Trump Knows Economy

[Mousit]

What i do not understand is why the merger requires Chinese approval.

They required approval to continue operating within China after merging. Pretty much every major economic power reviews mergers of foreign companies that operate within their markets, US and EU included. Usually there's a threshold I think; they review it if the foreign companies have a large enough market influence/impact.

Re:Trump Knows Economy

[Anonymous Coward]

Regulations are supposed to be based on law, not on whims. If the Chinese did in fact block the merger based on trade policy rather than actual written law, it just goes to prove the case against them in the trade disputes in regards to strong arming foreign companies for Chinese gain. In the case of ZTE, they clearly violated US export laws/signed contracts with their US supplier. They were given a penalty for doing so, then ignored that penalty. That's when the stricter ban on access to US technology was enacted.

Re:Trump Knows Economy

[johanw]

Your story is a nice theory but in practice it works the other way around: can we invent a story based on the law to allow or block this merger, whetaver the desired outcome is.

Re:Trump Knows Economy

[Anonymous Coward]

Those criticizing Trump's war are really saying "DON'T ROCK THE BOAT!". Those who negotiated US trade policies are making handsome profits and could care less about the effect it has on those at the bottom of the ladder. And it's those who sink billions of dollars into the US political system who create the trade policies and then make sure their paid political stooges earn those millions it took to put them in office. The politicians can't balance their own checkbooks so they have no clue what the result of the policies they take their marching orders and place their masters votes. Nobody is arguing that the current trade policies are fair they arguing for leaving things the way they are. It doesn't matter that the US has been the side who makes the sacrifices so the other countries can have their demands met. After all the US is big and powerful so certainly it should be willing to share a little of the prosperity for those in need. China negotiates like they are some 3rd world country barely scrapping by while subsidizing every industry in the country, manipulating it's currency to set it's export prices, forcing IP turnover if a country wants access to the domestic Chinese economy, while stealing every piece of technology and every piece of intellectual property they can get their hands on. I like how the article mentioned "alleged" when talking about the rampant theft China commits on a daily basis across the world. It's like saying it is "alleged" that the Earth orbits the Sun.

Trump sucks as a President but his Presidency has given the international community the swift kick in nuts they have needed. You want to be considered a US "Allie"? What does the US get out of the deal? He has demonstrated just how much respect the Senators and Representatives deserve. After all it is these lofty politicians with no term limits and no limits on campaign donations who have ran the country into the ground. A President doesn't have the power to do 1% of the amount of damage those assholes in Congress can do. And the major news media comes into a close second place when it comes to wreaking havoc on the country. Trump's Presidency forced those assholes out of the closet and into the spotlight where their bias and lack of objectivity is there for all to see. And then their are the professional political commentators and experts who never entertained the slightest thought that Trump would beat Clinton. That's a pretty strong indictment of their job performance and instead of being fired for gross incompetence they are still in the spotlight 24/7 pretending to be experts. And all the various forces who have been trying to forment a governmental coup are in danger of over playing their hand and they are to stupid to see the consequences of their actions. They seem to think that as soon as Trump is gone things will go back to the way it used to be. That ship has already sailed. The hyper polarization and governmental incompetence is going to be even worse after Trump. People should have accepted that the President has a 4 year term and then let his record prevent him from winning or even running for re-election. The losers of the last election have not addressed any of their policy missteps that resulted in them losing the last election. And their missteps were so fucking bad that a person like Trump was able to beat them. That says more about the losers than it does about Trump if you think about it. Believe it or the US has had worse Presidents than Trump and survived and even prospered. The greatest President who was elected 5 times broke every rule in the book when he ran the country. He openly defied and ignored every Congressional law aimed at keeping the US out of WW2. Had the Japanese not committed one of the stupidest actions in military history the world might look a little different today. To try and bring the country out of the Depression era he used his upper class status and family contacts to get the 5
wealthiest industrialists in the US to revitalize the US consumer economy. And he was a fucking Democrat!

Re:Trump Knows Economy

[CaffeinatedBacon]

Stopped reading after 2 sentences.

Those criticizing Trump's war are really saying "DON'T ROCK THE BOAT!". Those who negotiated US trade policies are making handsome profits and could care less about the effect

I couldn't care less about the rest of your comment.

Re: Trump Knows Economy

[Anonymous Coward]

Because you couldn't care less about the effect your sellout trade policies have on those at the bottom of the ladder.

Re: Trump Knows Economy

[Anonymous Coward]

I guess you forgot that selling chips in China and designing in us is precisely how the trade deficitis supposed to be reduced b/w us and China.

Re: Trump Knows Economy

[CaffeinatedBacon]

I was wrong, I could care less. I care even less about your comment.

Re: Trump Knows Economy

[Anonymous Coward]

lol you don't know a goddamn thing about the economy or how any of it works you blithering hack

Re:Trump Knows Economy

[hackingbear]

This non-action response in this case being a tactic in the trade dispute is only a theory propagated by the American side, and indeed denied by the Chinese government officially.

So this is no different that the U.S. using Iran sanction violation to punish ZTE as the first shot of the trade war. The U.S. would insist it is for "national security." But why would anyone really believe that?

The U.S. commits strong arming just like everybody else.

I thought the Chinese were smarter

[Anonymous Coward]

They actually believe that the current administration gives a rip about Americans who are struggling to make ends meet? LOL!

Re:I thought the Chinese were smarter

[Anonymous Coward]

Growing the economy so that the unemployment rate is at historical lows is caring about those struggling. The best thing you can do is provide the means for people to support themselves. That gives them independence and pride. Liberal policy is to create dependence on the government. They don't care if you have a job or not. They want you dependent on government programs so you keep voting for them and giving them the power to decide how you live. The common liberal voter obviously does not look at it that way, but that's because those in power have successfully created a brand of of compassion that speaks to people's emotions while also demonizing the right's opposition to free handouts.

Re: I thought the Chinese were smarter

[Anonymous Coward]

Yea in places like Australia and The Netherlands where the government gives out free health care and education, the citizens are morbidly dependent zombies incapable of independent action.

Re:I thought the Chinese were smarter

[another_twilight]

Growing the economy so that the unemployment rate is at historical lows is caring about those struggling

One of the justifications for the claim that the economy is growing is the number of people employed - but the unemployment rate isn't the best measure, especially on its own. The participation rate for the US has been pretty much flat at about 62-63% for the last four years, and shows a steady decline from 2008 where it was 66%. That's still only looking at people who are actively seeking work. Those who have given up aren't counted, just as those who haven't looked for work in the last 4 weeks are 'unemployed'.

These are not the graphs of an economy in growth. That's mostly fallout from the GFC and finger pointing to either Republicans or Democrats misses the point. There's a problem. It needs work to fix it.

https://www.lowyinstitute.org/...

I'm not addressing your "liberal is this; liberal is that" - I'm not from the US and the identity politics that are dividing people who would otherwise have enough in common to reach a useful compromise is deeply distressing.

That a large section of the population feels betrayed and disenfranchised is clear. That their elected representatives are not representing their interests is also clear (with a few, often independent, exceptions). Neither party has the interests of the majority of people - both court the wealthy. Trump's election is a clear indication of this, but neither party seems likely to do anything different. Why should they? They aren't being abandoned by their supporters. Instead, they point their people at the other and demonise them. Republicans blame Democrats; Democrats Republicans. Both parties have loony fringes that are easy to exaggerate and, it seems, easy to convince their supporters are the 'true' face of the 'opposition'.

I've friends who are ex-pat US. They describe the US system of government as one of compromise, with moderates from either of the major parties finding ways to bridge the gap to get things done. The current 'spoiling' play that's started at the highest levels and is being picked up by followers and supporters highlights the weakness of the US 'first past the post' two party system.

Trump isn't likely to be the answer. The 'answer' is going to be a moderate who can convince others to join them in working on a solution. Could be a republican or a democrat, or some third party. Things might need to get worse before they get better.

Re:I thought the Chinese were smarter

[radarskiy]

The article you cite does not mention the aging Baby Boomer generation even once.

I'm not saying retiring Boomers explains away the whole decline, but to fail to include a large, well-known, and anticipated demographic shift in an analysis on participation rate---even to refute its effect---makes the whole thing suspect.

China stopped and American company buying dutch?

[aberglas]

How is this in China's jurisdiction?

The con artist should know

[quonset]

low-price Chinese imports are needed to "make ends meet" for cash-strapped Americans.

It's why he has his name brand clothes made in China rather than U.S. and until recently, so did his daughter.

Funny how the con artist touts made in America yet refuses to have his stuff made here.

Re:China stopped and American company buying dutch

[Mousit]

Both Qualcomm and NXP do business in China. What they need approval from China for is to continue doing business in China, as a merged company. China couldn't directly stop the merger itself, no, but they could stop the newly combined company from operating within their borders.

As TFS summary itself mentions, China represents 30% of Qualcomm's revenue. NXP similarly does significant business in China. Losing that market would be a massive loss, so they chose not to merge rather than lose access to the Chinese market.

This is not at all unique to China. The EU and the US also do this sort of merger review of foreign companies that do business within their respective markets.

Logical

[johanw]

The Chinese learnt from the ZTE case that yu should do as little as possible buisiness with American companies. NXP is now a Dutch company, but it would become a US company subject to their idiot sanctions. Trump tried to prevert sanctions against ZTE but congress didn't let him. So now the US gets repaid for the congress decision.

As a Dutch national I'm disappointed that it required action from the Chinese to block this merger. The Dutch government itself should have prevented that US companies would buy up our national treasures.

Re: Logical

[Anonymous Coward]

What we need is a Kind of Airbus for Semiconductors and IT.

Infineon and ST should join NXP.

Re:Logical

[tlhIngan]

The Chinese learnt from the ZTE case that yu should do as little as possible buisiness with American companies. NXP is now a Dutch company, but it would become a US company subject to their idiot sanctions. Trump tried to prevert sanctions against ZTE but congress didn't let him. So now the US gets repaid for the congress decision.

Good, because ZTE violated all sorts of regulations that were inposed on it.

The only reason Trump supported ZTE was China invested $500M into Trump hotels and granted Ivanka Trump a rare Chinese trademark. That's it. A little backroom dealing and let's forget that we asked you nicely to not resell those parts to places we asked you not to. And it's not like it was the first time, either.

If you ever wonder why Trump seems to care for Putin, again, remember Russia is one of the few places where Trump's business are actually succeeding, quite well in fact. Everywhere else they are doing terribly. All this from a President who has not divested himself of his businesses while in power.

Congress simply grew a backbone and enforced the order. Or shall we say, China did not scratch their backs obviously.

Re:Logical

[Anonymous Coward]

Good, because ZTE violated all sorts of regulations that were inposed on it.

...all of which outside the jurisdiction of the country that imposed them.

Two Beellion! dollars

[godel_56]

What gets me is the size of the 2 billion dollar termination fee for a deal only worth 44 billion dollars in total.

A termination fee is only supposed to cover the cost of due diligence and legal preparations leading up to the takeover or merger.. In some cases the boards establish an excessive termination fee to ensure shareholders approve a deal, because they know the company will receive a crippling penalty if they don't give approval.

I've read that a reasonable termination fee should not exceed 2 per cent of the total value or $880 million in this case (still way too high IMO).

Re:Two Beellion! dollars

[Snuggles]

It was not just a DD+legal, NXP divested their standard products and small signal stuff as Nexperia and imported some of the culture and practices of giving out technical information to SME customers.
I know quite a few companies that dropped NXP out from their design-in process due to merger, which causes long term damage. They also EOLed number of special discretes, but that was unfortunately to be expected and many companies bought lifetime supplies when the deal was announced.

Re:Two Beellion! dollars

[thegarbz]

This wasn't a merger. This was a mess. Now that the deal is off Qualcomm are $2bn poorer, but NXP is a very different company than it was before due to the number of changes that were made to get the merger through.

I doubt $2bn will actually cover the costs.

Re:Two Beellion! dollars

[swillden]

NXP is a very different company than it was before due to the number of changes that were made to get the merger through.

Can you elaborate on that?

Re:Two Beellion! dollars

[thegarbz]

Yes, from the very beginning in 2016 when Qualcomm and NXP announced their intention to merge they knew they would not get past any regulators. The actual investment plan involved the divestment of a chunk of NXP before the Qualcomm merger goes ahead, that was one of the reasons why there was such a high $2bn penalty as a result.

It didn't cover the costs because NXP divested it's Standard Products division to MCHI for $2.8bn keeping only the parts of the company that Qualcomm was actually interested in. However that may not be the full story. NXP previous divested it's RF division (part of Standard Products) in 2015 as a condition of buying Freescale which had a competing division. This also has a competing division with Qualcomm, so one school of thought is they were trying to divest this anyway, and another was that they divested to smooth things with the regulator.

Either way NXP lost a chunk of its business during all this merger and acquisition talks that it won't get back now that talks broke down.

Re:Two Beellion! dollars

[swillden]

Thanks.

American dream

[dromgodis]

[...] low-price Chinese imports are needed to "make ends meet" for cash-strapped Americans [...]

So much for the American Dream.

"[...] an upward social mobility for the family and children, achieved through hard work in a society with few barriers"
(https://en.wikipedia.org/wiki/American_Dream)

I don't live in the USA but somehow the qoute makes me sad.

The Dutch

[Anonymous Coward]

And their mighty war machines will end you all!

Re: China stopped and American company buying dutc

[Anonymous Coward]

I completely fail to see how this is capitalist in any way shape or form. Wtf is wrong with you people? Let biz do its thing.

intellectual pooperty

[Anonymous Coward]

Correct me if I'm wrong, but isn't Intellectual Pooperty just about the only thing Qualcomm exports? Aren't they just another "brand" that shipped all their manufacturing jobs to low wage countries?

Well cry me a river, you bourgeois twats. You sold out the American worker to boost your quarterly profits. And now it's come back to bite you in the ass. Hahahahahaha!