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US computer chip giant Qualcomm announced that it dropped a $43 billion acquisition of Dutch rival NXP after failing to win approval of antitrust authorities in China.

The move comes amid increasing trade tensions between the United States and China. Qualcomm had extended the deadline several times for the tie-up which would have given the dominant smartphone chipmaker firm a broader array of products including sensors and microprocessors for connected Internet of Things devices.

It also raised its bid from $110 to $127 a share in February, to the irritation of fellow chipmaker Broadcom, which itself recently had a hostile bid for Qualcomm blocked by the White House.

Washington said the acquisition of Qualcomm by Broadcom - now Singapore-based - would help Chinese competitors such as Huawei, particularly in the emerging 5G blazing fast wireless internet, where a stronger China could present a national security issue.

According to Qualcomm, the acquisition of NXP has received antitrust clearance from eight of the nine required government regulatory bodies around the world, with the matter still pending in China, suggesting the takeover may be a collateral victim of US-China trade tensions.

"We intend to terminate our purchase agreement to acquire NXP when the agreement expires pending any new material developments," Mollenkopf said in a statement with the company's quarterly earnings.

"In addition, as previously indicated, upon termination of the agreement, we intend to pursue a stock repurchase program of up to $30 billion to deliver significant value to our stockholders." The company also said it expected to pay NXP a $2 billion breakup fee.

Based in the Dutch town of Eindhoven, NXP is a leading maker of chips for the auto industry, as well as for contactless payment systems. A former division of the Dutch electronics giant Philips, it became independent in 2006.

China's stance
China sought to deflect blame after the US chipmaker dropped the merger with Dutch rival NXP over its failure to receive Chinese regulatory blessing, with Beijing saying it was still open to discussions.

The unexpected statement came a day after the American tech giant called off the planned $43-billion merger, which had failed to receive approval from Chinese antitrust authorities.

The State Administration for Market Regulation (SAMR) said it knows that Qualcomm and NXP have decided to abandon the transaction, and finds that regrettable.

"The results of our evaluation show that Qualcomm's latest plan cannot resolve competition issues... we hope to continue communicating with Qualcomm to find a solution within the review period."

It was not immediately clear whether the regulator's statement meant the deal could potentially be revived.

"Companies including Qualcomm, NXP are welcome to do business in China as long as they bring benefits to the Chinese people and help create a business environment that is international, lawful and convenient," SAMR added.

Chinese regulators said the deal would have created a virtual monopoly with "deep and far-reaching" consequences.

China has voiced long-term plans to boost innovation and growth in its own high-tech sector, a strategy aimed at challenging US dominance and reducing Chinese reliance on foreign chips and other technology.

US Treasury Secretary Steven Mnuchin expressed disappointment that the deal fell through but sidestepped questions on whether it was related to the standoff with China. Officials in Beijing have also denied any link between the merger's collapse and China-US trade frictions.