October 27, 2016
By Nandeep Roopray
Biggest semiconductors deal
On October 27, US firm Qualcomm bid $47.0bn to acquire Dutch company NXP Semiconductors, in line to be the largest European Technology targeted M&A deal on record. The deal is also the biggest Semiconductors targeted M&A deal on record globally, surpassing the $36.1bn acquisition of Broadcom by Avago Technologies announced in May 2015.
Global tech M&A
Global Technology M&A volume in 2016 YTD ($530.5bn) already stands at the second highest annual total on record, behind $692.4bn announced in full year 2015. Global Semiconductors targeted M&A volume has hit an annual high of $127.1bn in 2016, up 13% from the previous record set in 2015 ($112.2bn).
The second largest European Technology targeted M&A deal on record has also been announced in 2016, the $31.6bn bid for a 98.6% stake in UK’s ARM Holdings by Japan’s SoftBank Group, announced on July 18.
Global cross‐border M&A this year stands at the third highest YTD total on record, with $1.09tr, behind 2007 ($1.50tr) and 2015 ($1.18tr). Chinese acquirors lead the way with an annual high of $198.6bn. US acquiror volume of $181.2bn is the third highest YTD total on record behind 2007 ($209.8bn) and 2015 ($188.9bn).
The $47.0bn bid for NXP Semiconductors by Qualcomm is the biggest US acquisition of a European company on record, surpassing Virgin Media/Liberty Global, announced in February 2013 for $25.1bn.
In August 2006, NXP Semiconductors, at the time known as Philips Semiconductors, was acquired for $9.5bn by a consortium of Financial Sponsors, including KKR, Silver Lake, Apax Partners, Bain Capital and AlpInvest Partners. In August 2010, NXP Semiconductors was listed on the NASDAQ, raising $476m for the issuer. Since the IPO, 14 sell‐downs have raised a combined $10.5bn for the shareholders, with the final clean‐up in July 2016 by Carlyle, TPG Capital and Blackstone, having inherited NXP Semiconductors shares via its $16.8bn acquisition of Freescale Semiconductor in March 2015. Three months after the full exit, NXP Semiconductors is the subject of a $47.0bn acquisition, the largest European targeted M&A deal in 2016 YTD.
European targeted M&A volume has dropped 25% year‐on‐year in 2016, hitting a 3-year low with $662.4bn. In comparison, global M&A has dropped by 21%, to $2.99tr, from $3.78tr in 2015 YTD. 2016, however, is still the fourth highest YTD total on record for global M&A volume, behind 2015, 2007 ($3.88tr) and 2006 ($3.08tr).