Qualcomm is nearing a deal to acquire NXP Semiconductors for around $37 billion, a person familiar with the matter said on Friday, as the U.S. company seeks to expand the reach of its chips from phones to cars.
The deal would make San Diego-based Qualcomm, which supplies Android smartphone makers and Apple, a bigger supplier to the automotive industry as it grapples with slowing smartphone sales and stiff competition from Chinese and Taiwanese rivals.
The acquisition of NXP by Qualcomm for $110 per share in cash could be announced within days, although there is always a possibility of a last-minute glitch, the source said, asking not to be identified because the negotiations are confidential.
NXP shares dropped 2.5% on the news to $101.90, while Qualcomm shares were up 2.2% to $68.77, indicating that the terms were seen by investors as more favorable to chip maker.
The company gets the bulk of its revenue from chip sales but most of its profit comes from wireless patents it licenses to the mobile industry. It explored a plan to break up its chip business from its patent licensing unit after pressure from activist investor Jana Partners but decided to remain whole.
Qualcomm ranked third in terms of revenue among global semiconductor companies in 2015, while Eindhoven, Netherlands-based NXP ranked No. 7, according to research firm IHS.