Qualcomm-NXP Deal Faces Moment of Truth

The semiconductor industry’s largest-ever deal will be dead or done by the middle of the week, according to Bloomberg.

Qualcomm is at the end of a nearly two-year wait for China’s government to sign off on its $44 billion purchase of NXP Semiconductors. Because the companies both operate in the world’s largest market for chips, the merger requires approval even though shareholders and other governments have already given it the go-ahead. It’s the last remaining hurdle since the acquisition was announced in October 2016.

Chinese agencies responsible for vetting deals have already signed off, people familiar with the steps have said. The final authorization could be processed and made public at short notice if China’s political leaders decide to release it. NXP gave Qualcomm until 11:59 p.m. on Wednesday, July 25 in New York to get it done. Absent any word from China, Qualcomm doesn’t plan to seek an extension.

If the deal falls apart, Qualcomm will have to pay NXP a $2 billion breakup fee. The U.S. company’s investors can also anticipate a pay out, because it has said it will devote the majority of its almost $40 billion cash pile to repurchasing shares. While that’ll provide a boost for a stock that continues to underperform the market, Qualcomm will be left with fewer strategic options and may find it harder to deliver the planned expansion into new markets.