QCOM QUALCOMM Inc

By Stu Woo 

NXP Semiconductors NV Chief Executive Rick Clemmer, facing investors for the first time since his deal to sell the company to Qualcomm Inc. fell apart, said he plans to give cash back to shareholders, as part of the Dutch chip maker's new go-it-alone strategy.

NXP received a $2 billion breakup fee from Qualcomm after its failure to win approval from Chinese regulators for the proposed $44 billion deal. Aside from rewarding shareholders, Mr. Clemmer said he didn't plan to significantly alter his company's predeal strategy, which focused on leading the market for chips for automobiles.

"We hadn't gone through the strategy a lot in the 21-month period of time" that the company was waiting for regulatory approval, Mr. Clemmer said in an interview Monday. "As soon as I realized there was a chance the deal would break, I said we'd dust off our strategy, not reformulate strategy."

NXP's investor day in New York on Tuesday marks the first time the company has seriously engaged investors and analysts since Qualcomm announced the proposed merger in October 2016. Qualcomm had asked NXP to keep quiet during the transaction process, so Mr. Clemmer didn't hold conference calls or meet with investors or analysts during that time.

Mr. Clemmer said he planned to tell investors that his is a functioning company that doesn't need major changes. He said he would focus on explaining some recent moves: removing a layer of management, combining two divisions and entering the electric-vehicle market with a new product.

He said he also hoped to persuade investors that he and his management team are engaged. NXP has already committed $200 million, taken from the breakup fee, to offer incentives to entice the company's management team to stay for three years.

Mr. Clemmer said he met Qualcomm CEO Steve Mollenkopf at a March 2016 conference to pitch selling NXP's digital-networking division to him. He said Mr. Mollenkopf countered by asking for the whole company.

"I said, 'Wait, that's not the purpose of our discussion,' " Mr. Clemmer said.

The two sides announced the deal in October 2016 for $39 billion; Qualcomm later raised its bid to $44 billion. Mr. Clemmer said he and Mr. Mollenkopf held weekly calls, and that the two and their wives spent a weekend this year at Mr. Clemmer's house in Cabo San Lucas, Mexico, to bond during nonwork hours.

An intensifying trade spat between the U.S. and China weighed on the deal's prospects. On May 14, NXP stock jumped 12% after President Trump said he was working with Chinese President Xi Jinping to extend a reprieve to ZTE Corp., the Chinese telecommunications company that Washington had punished for breaking terms of a sanctions-busting settlement. A month later, Mr. Clemmer joined a Dutch delegation at the White House and left with the impression that U.S.-China trade tensions were easing and that the Qualcomm-NXP deal would no longer be a negotiating chip.

Still, in May, he asked his strategy team to create a Plan B in case the deal fell through. "We thought it was wasted effort," Mr. Clemmer said, "but we thought it was too critical to not have a backup plan in place because of the trade tension."

Mr. Clemmer didn't give up on the deal until the midnight deadline passed in July.

A North Texas native who spent his teenage summers managing his father's lumberyard, Mr. Clemmer had planned on taking a vacation in the south of France this summer and then starting a tech startup with friends. He had sold $400 million of NXP shares in 2017 because, he said, his tax rate was changing from 30% to 52%.

Instead, he said he has spent the past weeks meeting with skeptical analysts and investors, including Bernstein Research's Stacy Rasgon. "I didn't feel like they were just spinning in their chairs for two years," Mr. Rasgon said. Still, he said Mr. Clemmer's challenges will be running NXP after it lost top managers during the merger process, and providing a clear corporate strategy.

(END) Dow Jones Newswires

September 10, 2018 15:26 ET (19:26 GMT)

Grafico Azioni QUALCOMM (NASDAQ:QCOM)
Storico
Da Mar 2024 a Apr 2024

Grafico Azioni QUALCOMM (NASDAQ:QCOM)
Storico
Da Apr 2023 a Apr 2024