EU regulators to probe Qualcomm's $38 billion bid for NXP Semiconductors

EU antitrust authorities yesterday launched an investigation into Qualcomm's $38-billion bid for NXP Semiconductors, pressuring the US smartphone chipmaker to offer concessions to address their concerns.

Qualcomm, which is a supplier of chips to Android smartphone makers and Apple, would become the leading supplier to the fast growing automotive chip market following the deal, the largest-ever in the semiconductor industry.

The European Commission (EC) listed a number of concerns about the combined company's ability and incentives to undermine rivals and increase prices. It added, the company might bundle its products, excluding rivals in baseband chipsets and near field communication (NFC) chips.

The combined entity would also have the ability and the incentive to change NXP's intellectual property licensing practices, especially the NFC technology, by associating this with Qualcomm's patent portfolio, the EU watchdog said.

It also voiced concerns over reduced competition in semiconductors used in cars. The decision on the deal would be taken by 17 October.

Qualcomm added that it was confident of allaying the EU's worries and that it still expected to close the deal by the end of the year. The green light for the deal had been given by US antitrust enforcers in April.

"We use our electronic devices every day - mobile phones or tablets," said EC competition commissioner Margrethe Vestager in a statement. "As semiconductors are used in practically every electronic device, we are dependent on them in those devices. With this investigation, we want to ensure that consumers will continue to benefit from secure and innovative products at competitive prices."

Reacting to the European announcement in a separate statement, yesterday, Qualcomm said both it and NXP had expected a thorough review process and would be working with regulators to obtain approvals. The chipmaker added that the deal had already received clearance from the US Federal Trade Commission.