On November 25 2015 the US Federal Trade Commission (FTC) and the Chinese Ministry of Commerce (MOFCOM) approved NXP Semiconductors NV's proposed $11.8 billion takeover of Freescale Semiconductor Ltd on the condition that NXP divested its radio frequency power amplifier assets to alleviate the agencies' competition concerns. In September 2015 the European Commission gave the deal a similar go-ahead after NXP offered the same divestiture. Netherlands-based NXP and Texas-based Freescale, which develop and manufacture semiconductor products for a wide range of electronic systems, announced the merger in March 2015.

The convergence of the three antitrust agencies' remedies, as well as the close timing of the clearance decisions, should be encouraging for companies considering global transactions that could raise substantive concerns across the Atlantic and Pacific.

Competition assessment

The three agencies appear to have defined the relevant product market in slightly different ways. While the FTC defined the relevant market as "radio frequency power amplifiers", MOFCOM and the European Commission looked into smaller sub-segments of radio frequency power amplifiers. Nevertheless, all of them reached the same conclusion that the market of radio frequency power amplifiers is highly concentrated and that the two parties in question are the two largest market players. The FTC alleged that the two parties have a greater than 60% combined worldwide share of radio frequency power amplifiers, with Infineon Technologies AG the only other significant competitor.


To address these concerns, NXP committed to all three agencies to divest all of its radio frequency power amplifier business. It proposed to the European Commission to:

  • sell its radio frequency power amplifier business, comprising all key assets and personnel, except assets necessary for the 'front-end' manufacturing of these products;
  • enter into an agreement with a third-party foundry to perform front-end manufacturing services for the divested business; and
  • provide the divested business with the transitional services to guarantee business continuity.

The purchaser was not identified at that stage.

The FTC's order required NXP to divest all of its assets that are used primarily to manufacture, research and develop its radio frequency power amplifiers, as well as to grant the divested business a royalty-free licence to use all other NXP patents and technologies. Similarly, MOFCOM ordered NXP to divest its radio frequency power business, comprising tangible and intangible assets as listed in detail in NXP's final commitments to MOFCOM. Neither the FTC nor MOFCOM carved out the front-end manufacturing assets from the divested assets. Both agencies required NXP also to provide transitional assistance to the divested business. A monitoring trustee will oversee NXP's compliance with the obligations set forth in these decisions.

The purchaser of NXP's radio frequency power amplifier business is Beijing Jianguang Asset Management Co, Ltd (JAC), a subsidiary of JIC Capital, which is a Chinese state-owned investment group. On June 22 2015 NXP announced that it intended to file joint voluntary notices with the Committee on Foreign Investment in the United States (CFIUS) for the acquisition of Freescale and the sale of the divested business to JAC. CFIUS conducts national security reviews of acquisitions by foreign persons of US businesses. On October 13 2015 NXP announced that CFIUS had concluded its review of the NXP-Freescale transaction. NXP announced on November 24 2015, one day before FTC clearance was announced, that CFIUS had approved its transaction with JAC.


While the substantive concern appears to have been fairly straightforward – the transaction was a clear three-to-two transaction in radio frequency power amplifiers according to all three agencies – the deal is significant because it highlights how the US, EU and Chinese merger control agencies can work (relatively) harmoniously to achieve a consistent worldwide remedy. Moreover, the parties' upfront approach to the remedy appears to have helped to create the possibility of such coordination. The European Commission confirmed that at the same time as submitting its merger filing, NXP also put forward a set of measures designed to allay any competition concerns. MOFCOM also explicitly mentioned in its decision that as early as the preliminary stage of the merger review, NXP proposed the divestiture plan to MOFCOM. In its press release, the FTC mentioned its cooperation with other antitrust agencies in various jurisdictions throughout this investigation, including on the analysis of the proposed transaction and potential remedies, to reach compatible approaches on an international scale. Such interagency coordination again puts a spotlight on the importance of both creating a coherent global merger clearance strategy from the beginning and achieving consistent management of multi-jurisdictional merger filings.

Finally, CFIUS's clearance of the NXP-JAC transaction is also instructive. The radio frequency power amplifier business that JAC acquired focuses primarily on the cellular base station market, so CFIUS's clearance is another reminder that CFIUS continues to clear Chinese acquisitions of US businesses – even those involving a Chinese government-owned buyer and a US business with a nexus to a sensitive sector. In this transaction, the 'folding in' of the CFIUS clearance for the divestiture before the FTC and MOFCOM approvals further highlights the need for and benefits of cross-jurisdiction interdisciplinary cooperation.

For further information on this topic please contact Logan Breed or Brian Curran at Hogan Lovells US LLP's Washington DC office by telephone (+1 202 637 5600) or email ( or Alternatively, contact Adrian Emch at Hogan Lovells International LLP's Beiijing office by telephone (+86 10 6582 9488) or email ( The Hogan Lovells website can be accessed at

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