Samsung, has indicated it is in the market to make major acquisitions to boost its position, particularly in the automotive market, where it has little presence (see Reports: NXP, Infineon top Samsung's shopping list).
At the end of last year Samsung had a cash position of about 125 trillion won (about US$110 billion) but while that could have bought multiple automotive chip companies in 2020, the chip shortage and key role of those chip companies has increased their value.
In the seven months since February 1, 2021 NXP's market capitalization has moved from $48 billion to approaching $60 billion and with an acquisition premium Samsung might have to pay $70 billion to buy the company, even if it would be allowed.
"NXP Semiconductors is becoming expensive. The automotive chip industry will further expand, and given NXP's market position, it will be viewed as appropriate for Samsung and actually it could be the right fit to help Samsung fill in its weakness in the contract-chip making and automotive solution businesses, but NXP is too pricey," the Korea Times quoted an unnamed executive as saying. "Samsung doesn't want to embrace the risk of possibly overpaying because multi-billion-dollar acquisition deals always carry huge risks."
Samsung has had its eye on NXP for several years but in 2016 it was Qualcomm that agreed a deal to acquire the Dutch for $44 billion (see Qualcomm, NXP discuss merger, say reports). However, acquisition did not proceed as it failed to gain approval from Chinese authorities and time passed (see NXP acquisition by Qualcomm about to collapse).
Any NXP acquisition deal would depend on anti-trust reviews in multiple territories but as Samsung has been a major investor in China it may be able to make swifter progress with the Chinese authorities. However, Samsung is wary of NXP's current valuation.
This may mean that Samsung's attention will turn elsewhere in the automotive semiconductor sector or that it may be forced to wait and attempt to buy on a subsequent dip in value.
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