Qualcomm's acquisition of En Zhipu

Latest news: Qualcomm's acquisition of Enzhipu is nearing its biggest technology (semiconductor) acquisition this year

Bloomberg reports that Qualcomm is further negotiating with NXP Semiconductors in the Netherlands for a takeover. The price difference between the two sides has not been settled and has been reduced to less than 10%.

The gap in valuation between Qualcomm and Enchipu is less than 10%. Qualcomm is considering a 75% cash plus 25% stock acquisition. Another source disclosed that Enzhipu hoped Qualcomm would buy it all in cash.

NZP shares closed at $102.5 on Wednesday, with a market capitalization of about $35 billion. Brooke Sutherland, a Bloomberg quick commentary columnist, points out that if the two sides finally agree on a price of $115 per share, the deal will contain debt of $47 billion, making it the largest acquisition in the semiconductor industry this year.

For Qualcomm, Enzhipu is a shortcut to the automotive chip market. Under the current bottleneck situation of mobile chip development, it is imperative for Qualcomm to expand into new areas, and Enzhipu just provides such opportunities.

Other competitors have withdrawn

There are few manufacturers in the semiconductor manufacturing industry that have the ability or even intend to acquire Enchipu. Of the chipmakers included in the Philadelphia Stock Exchange Semiconductor Index, only seven have a market capitalization higher than Enchips. Two of them belong to a completely different chip industry from En Zhipu, while the other two, Intel and Broadcom, are still digesting record acquisitions. Among the remaining companies, Qualcomm has the highest cash holdings, reaching $31 billion.

Intel and Texas Instruments decided to abandon the acquisition after an internal review of the deal, people familiar with the matter said. Qualcomm, Enthusip, Intel and Texas Instruments declined to comment on the report.

Qualcomm, with a market capitalization of about $98 billion, is considering acquiring Enzhipu while abandoning four other acquisitions, two people familiar with the matter said. Qualcomm has been studying this potential acquisition target for at least six months. According to people familiar with the matter, acquisition of Enzhipu will not only help Qualcomm consolidate its position in the chip market, but also help to reassure shareholders: Qualcomm shareholders hope that the world's largest mobile chip maker will invest its capital in the stock market to generate more revenue.

If Qualcomm and En Zhipu can conclude a takeover deal, it will be the largest technology acquisition this year.