US chip manufacturer Qualcomm, Inc. (NASDAQ:QCOM) has provided concessions as part of its plan to alleviate EU antitrust concerns regarding its massive bid for NXP Semiconductors.
The company submitted a proposal on the matter to the European regulator on September 5. The filing appeared on the EU website on Monday but it did not go into details. The European watchdog has extended the deadline for its final verdict while it waits for Qualcomm to provide more information. This also marks the second time that the EU has pushed back the deadline with the previous deadline of August 17.
The EU expects customers and rivals to provide feedback on the matter in the next few days. The commission is concerned that if Qualcomm acquires NXP Semiconductors, it might become too powerful and will most likely end up leading to an unfair advantage. The regulator is also worried that the company might push out the competition and end up raising prices, which will definitely be a bad thing for customers. The acquisition might also lead to changes in NXP’s model for intellectual property licenses.
“There is a “strong case” for expecting chipmaker Qualcomm Inc to raise its offer for NXP Semiconductors,” wrote Morgan Stanley (NYSE:MS) analysts in a note to investors on Monday.
It is currently not clear whether the concessions will work in the company’s favor but the Morgan Stanley analysts are confident about the value of the deal possibly going higher. The brokerage firm stated that they held talks at a symposium in which they interacted with a group of 40 investors. Apparently, most of the investors expressed sentiments in favor of Qualcomm raising its offer for the NXP deal.
Meanwhile, Morgan Stanley has set its price target for NXP’s stock at $117.5 which is significantly higher than the share price offer that Qualcomm presented for the acquisition in 2016. The fate of the acquisition however lies on the verdict that will be rendered by the EU.
Qualcomm stock closed the latest trading session on Monday at $52.88 after a 0.74 percent gain compared to the value of the stock during the previous close.