BEIJING, June 15 — Qualcomm Inc.’s US$43 billion (RM171.9 billion) acquisition of NXP Semiconductors NV has been approved by Chinese regulators, according to people familiar with the matter who asked not to be identified. The stocks rallied in extended trading, with gains continuing into today.

Clearance from China would remove the final regulatory hurdle for the purchase, which has been pending for more than 18 months. The decision by Chinese regulators will allow the transaction to be completed ahead of a July deadline set by NXP, which said it would abandon the deal if it wasn’t approved by then. Qualcomm and NXP declined to comment on an earlier report about the approval by the South China Morning Post.

San Diego-based Qualcomm is offering US$127.50 a share in cash for its Dutch rival. The US company’s shares were up 1 per cent at 4.22am in pre-market trading in New York today. NXP’s US shares were up 3 per cent at the same time, after surging 10 per cent in after hours trading.

China’s review of Qualcomm’s largest-ever acquisition has been languishing amid an escalating trade fight with the US, with NXP and Chinese telecom giant ZTE Corp. becoming bargaining chips in the negotiations. ZTE shares began trading again in Hong Kong earlier this week after the company agreed to a settlement with the US Commerce Department over its business practices, but Senate lawmakers are pushing to keep stiff sanctions on the company, leaving the agreement’s prospects unclear.

Late last month, people familiar with the matter told Bloomberg News that Chinese regulators had cleared all factual investigations on the NXP deal and were satisfied with the remedies Qualcomm offered. China would approve the deal if it was assured the seven-year ban on ZTE would be lifted, the people said.

Qualcomm, which had promised investors that it would have the deal closed by the end of 2017, wants NXP to diversify its sources of revenue. NXP would give it a stronger presence in the growing market for automotive chips and lessen its dependence on the slowing market for smartphones. If the deal falls apart, Qualcomm would owe NXP a US$2 billion breakup fee. — Bloomberg