Netherlands based, automotive chip maker NXP Semiconductors NV (NASDAQ:NXPI) may be up for grabs, media reports said Thursday.
The buyer could be cash-rich, deal-hungry QUALCOMM, Inc. (NASDAQ:QCOM), the US multinational semiconductor and telecom equipment company.
Deal size could be more than $30 billion, according to the Wall Street Journal.
Shares of NXP zoomed 16.88% to $96.12 on hefty volume of 24.42 million shares.
NXP Semiconductors NV (NASDAQ:NXPI) within kissing distance of new 52-week high
The surge in buying interest propelled NXP to near its 52-week high of $98.09 touched in October 2015.
NXP is already the global leader in automotive electronics after it acquired Freescale Semiconductor last year for $16.7 billion including debt.
However, in terms of global semiconductor revenue rankings, it ranks 7th against Qualcomm’s third position.
Qualcomm is sitting on a cash warchest of over $31 billion, and investors have been worried that it sat out the party in semiconductor industry M&A that saw about $180 billion in transactions (Bloomberg). If the NXP transaction goes through, all that cash (most of it held overseas) would be put to good use, according to analysts, considering its slowing fiscal revenues due to maturing businesses.
All those factors may ensure that NXP shareholders will likely get a good price for their holdings. Keep in mind that other bidders may throw the hat in the ring, too, for NXP. That could be the icing on the cake.
NXP Semiconductors NV (NASDAQ:NXPI) is a leader in self- and assisted-driving technology
An alliance with Qualcomm will enable NXP to further boost its current global leadership in this area of automotive technology.
“We continue to be really the only company that has gotten the technology design wins in vehicle to vehicle that we believe will be a very fundamental element in a complete autonomous driving solution,” said Richard L. Clemmer, President, Chief Executive Officer & Executive Director, on NXP’s last earnings call.
Technically, NXP appears to be resurfacing from its price correction that commenced in June this year and appears set to resume an uptrend.