Talks between Qualcomm (QCOM) and NXP Semiconductor (NXPI) are showing significant progress, according to a Bloomberg. Reporting by Bloomberg indicates that Qualcomm is the only company in talks with NXP about an acquisition. That is no rival suitors have emerged so far. And that the two companies are relatively close on terms. NXP is seeking a price of about $120 a share; Qualcomm has targeted $110. The two companies also have differences on the structure of the deal with Qualcomm offering 75% cash and remainder in stock and NXP preferring all cash.
Deals have been known to go sour on even less significant details than these, but these differences are certainly bridgeable.
An acquisition of NXP would turn Qualcomm from a company focused on smartphones (90% of sales) into one with a leading position in the faster growing market of semiconductors for automobiles.
For more on the significance of the deal–and why I like it–see my earlier post http://jubakam.com/2016/10/can-qualcomm-steal-nxp-semiconductor/.
Qualcomm is a member of my Dividend portfolio