AMD has finally received the green light from the Chinese government to acquire FPGA giant Xilinx. No official announcement has been made, but sleuths spotted the information in a Form 8-K filed with the US Securities and Exchange Commission (SEC). The deal was first announced in October 2020. The US and EU have already approved the acquisition, but in late December AMD said it had to delay its closing. , as Chinese regulators dragged out the process. The form filed this week states that “on January 27, 2022, Advanced Micro Devices, Inc. (“AMD”) and Xilinx, Inc. (“Xilinx”) received clearance from the National Office of Antimonopoly Policy of the ‘State Administration for Market Regulation of the People’s Republic of China Regarding the Merger (the “Merger”) of Thrones Merger Sub, Inc, a Wholly-owned Subsidiary of AMD (“Merger Sub”), with and into Xilinx , Xilinx remaining a wholly-owned subsidiary of AMD, pursuant to, and subject to the terms set forth in this agreement and plan of merger (“Merger Agreement”), dated October 26, 2020, by and between AMD”.
However, this slowness from China had other consequences for AMD. As the Serve The Home STH site points out, a regulation called the Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires parties involved in the merger and acquisition to notify the US Department of Justice and the Federal Trade Commission (FTC) of a merger, usually with an expiration date of one year from filing. Compared to AMD’s initial notification to the US Department of Justice and the FTC, the expiration date fell in early January. AMD must therefore wait until the expiry of the reflection period, i.e. February 9, 2022, before it can file a new application. The Biden administration would have the possibility of lifting this period of reflection, but did not give indications on the subject. The fact is that AMD has waited so long, that a few more weeks won’t change much.
Low politics and economic maneuvering
The processor industry has been overtaken by geopolitics, as China is an important market for chipmakers (notably Xilinx), and relations between the United States and China are fragile. In 2018, China failed to approve Qualcomm’s proposed acquisition of NXP Semiconductors for $44 billion, possibly in retaliation for China’s blacklisting of Chinese companies like Huawei and ZTE. Trump administration. The process has greatly harmed the Dutch company NXP. However, China did not deny approval either. She simply said nothing, the equivalent of a kind of “pocket veto”. It did the same with Nvidia and ARM, leaving the British opposition to do all the dirty work and say nothing, which caused this deal to drag on forever. Such an environment has had a deterrent effect on mergers and acquisitions in the semiconductor sector. While in 2020 there were many big deals, there were none in 2021. And for good reason: no one wants to be put to the test, spend millions on lawyers and legal costs, and having its business blocked because regulatory approval is denied.