September 25, 2022
Technology deals that failed to get regulatory approval

SoftBank on Monday announced the sale of chip designer arm to Nvidia, or $40 billion (about Rs 2,93,320 crore), which is set to reshape the semiconductor landscape.

The deal, which is subject to regulatory approval, including from Britain, the United States and China, would put Apple and others, a long-neutral technology vendor, in control of a single player.

It could face potential backlash from regulators, as the ongoing US-China tech spat puts any global deal in the semiconductor sector under very strict scrutiny.

Below is a list of major global deals that collapsed due to regulatory disapproval over the past five years:

  • In March 2018, US President Donald Trump blocked microchip maker Broadcom’s proposed acquisition of Qualcomm on national security grounds.
  • Qualcomm walked away from a $44 billion (about Rs 3,23,687 crore) deal to buy NXP Semiconductors after it failed to secure Chinese regulatory approval in July 2018 amid China-US trade talks. China’s State Administration for Market Regulation (SAMR), the antitrust regulator that reviewed the deal, did not respond to the companies after the deal expired.
  • Semiconductor equipment maker Lam terminated its $10.6 billion (about Rs 77,966 crore) deal to buy rival KLA-Tencor in 2016 after the US Justice Department told the companies the deal would hurt competition.

Some global deals were able to get China’s approval after making some changes or concessions:

  • China approved Google’s $12.5 billion (about Rs 91,941 crore) acquisition of Motorola in 2012 on the condition that Google would keep Android free and available without discriminating against any particular device maker for five years.
  • China in 2013 approved the US grain trader Gavilon’s purchase of Japanese trading house Marubeni for $5.6 billion (about Rs 41,185 crore) with strict conditions, such as keeping the two separate, independent trading units when selling soybeans to the country. to demand.
  • In 2014, Glencore sold a $5.2 billion (about Rs 38,234 crore) mining project to gain China’s approval for the $30 billion (about Rs 2,20,606 crore) acquisition of miner Xstrata.
  • In 2015 Nokia had to combine its China business with the former Alcatel-Lucent in the country for a 5.6 billion euro (about Rs 48,834 crore) merger with a China-approved French company. Beijing also stipulated that local telecommunications groups can renegotiate rates on mobile technology patents borrowed from Nokia and Alcatel if they are ever sold to a third party.
  • China conditionally approved the acquisition of chipmaker Broadcom for $5.5 billion (about Rs 40,458 crore) of Brocade Communications Systems in 2017.
  • China approved a $1.1 billion (about Rs 8,091 crore) purchase of Samsung’s printer business in 2017 with some restrictions, citing concerns about the US firm’s dominance in the domestic laser printer market.
  • Bayer received conditional approval from China’s commerce ministry for $65 billion (about Rs 478,142 crore) in 2018 after agreeing to offload some assets to the acquisition of world No. 1 seed company Monsanto.

© Thomson Reuters 2020

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