Qualcomm buys NXP Semiconductors for $38B

27 October- Qualcomm revealed this Thursday that it had agreed to acquire NXP Semiconductors for about $38 billion, expanding its presence in the increasingly productive market for automotive sensors and chips. Qualcomm said it would pay $110 per share for NXP and expects the deal to close by the end of 2017.

The deal gives the telecommunication giant a greater ledge in the blooming market for technology that will power self-driving cars — which represents a growth space compared to the soggy market for smart phones and other mobile devices.

NXP also has a judicious position in the market for technology powering the so-called Internet of Things as well as security products. The acquisition also marks the latest in a series of deals for the semiconductor business, accelerating the trend of consolidation.

In 2015, Avago announced plans to acquire Broadcom for $37 billion. Intel acquired chip maker Altera in 2015, while NXP agreed to take over Freescale Semiconductor.

Qualcomm said it expects to shed $500 million in costs annually within two years of the deal's closure, though it did not specify where the cuts would occur. When including the assumption of debt, the deal has enterprise value of about $47 billion.

“With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry," Qualcomm CEO Steve Mollenkopf said in a statement. "The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale."

NXP shares (NXPI) rose 2.9% in pre-market trading to $101.50.

Qualcomm shares (QCOM) were up 2.6% to $69.95.