Future Tech

Global technology deals that failed to get regulatory approval

Tan KW
Publish date: Mon, 14 Sep 2020, 08:48 PM
Tan KW
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Future Tech

SoftBank Group Corp announced on Sept 14 the sale of chip designer Arm to Nvidia Corp for as much as US$40bil in a deal set to reshape the semiconductor landscape.

The deal, which is subject to regulatory approvals including in Britain, the United States and China, will be putting a long-neutral technology vendor to Apple Inc and others under the control of a single player.

It could face potential pushback from regulators, as the ongoing US-China tech spats have put any global deal in the semiconductor sector under much tighter scrutiny.

Below are a list of prominent global deals that collapsed due to regulators' rejection in the last five years:

- US President Donald Trump in March, 2018, blocked microchip maker Broadcom Ltd's proposed takeover of Qualcomm Inc on national security grounds.

- Qualcomm Inc walked away from a US$44bil deal to buy NXP Semiconductors after failing to secure Chinese regulatory approval in July, 2018 amidst China-US trade talks. China's State Administration for Market Regulation (SAMR), the antitrust regulator reviewing the deal, did not respond to the companies after the deadline for the deal to expire passed.

- Semiconductor equipment maker Lam Research Corp in 2016 terminated its US$10.6bil deal to buy rival KLA-Tencor Corp after the US Department of Justice told the companies it had serious concerns that the deal would harm competition.

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

- China approved Google's US$12.5bil acquisition of Motorola in 2012 on the condition that Google keep Android free and available without discriminating against any particular device maker for five years.

- China cleared Japanese trading house Marubeni Corp's US$5.6bil purchase of US grain merchant Gavilon in 2013 with stiff conditions such as demanding the two keep separate, independent trading units when selling soybeans to the country.

- Glencore in 2014 sold a US$5.2bil mining project in order to win China's approval for its US$30bil takeover of miner Xstrata.

- Nokia in 2015 had to combine its China business with former Alcatel-Lucent's in the country for its €15.6bil merger with the French company to be approved by China. Beijing also stipulated that local telecoms groups could renegotiate rates on mobile technology patents borrowed from Nokia and Alcatel if they were ever sold on to a third party.

- China in 2017 conditionally approved chipmaker Broadcom Ltd's US$5.5bil acquisition of Brocade Communications Systems.

- China approved HP Inc's US$1.1bil purchase of Samsung Electronics' printer business with certain restrictions in 2017, citing concerns about the US firm's dominance of the domestic laser printer market.

- Bayer secured conditional approval from China's commerce ministry for its US$65bil acquisition of the world No. 1 seed company Monsanto in 2018 after agreeing to offload certain assets.

 - Reuters

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