Merger Control in China Following the Termination of Qualcomm/NXP

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On July 26, 2018, Qualcomm announced the termination of the acquisition of NXP following its inability to obtain antitrust clearance from China’s State Administration for Market Regulation (SAMR) prior to the transaction’s termination date. Questions have arisen as to whether the current trade tensions between the United States and China contributed to this outcome, and whether transactions requiring antitrust clearance in China may now face enhanced risk. In brief, while most transactions are unlikely to face increased risk in securing antitrust clearance in China, mega deals involving US companies may face enhanced scrutiny, particularly where legitimate competition issues present or sensitive industries are involved. Parties to transactions fitting this profile can take steps to help reduce risks associated with obtaining antitrust clearance in China in the current geopolitical environment.