Qualcomm offered to buy NXP without some of its patents in a bid to win EU antitrust regulatory approval

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U.S. smartphone chipmaker Qualcomm has offered to buy NXP Semiconductors without some of its patents in a bid to win EU antitrust regulatory approval for the $38 billion deal, two people familiar with the matter said on Tuesday.

The NXP deal, the biggest-ever in the semiconductor industry, would make Qualcomm the leading supplier to the fast-growing automotive chips market, reports Reuters.

Qualcomm, which supplies chips to Android smartphone makers and Apple, submitted its proposal to the European Commission on ct. 5, but did not provide details.

A man works on a tent for NXP Semiconductors in preparation for the 2015 International Consumer Electronics Show (CES) at Las Vegas Convention Center in Las Vegas, Nevada

The EU competition authority is worried that the merged company may provide incentives to customers to buy bundled products, thereby squeezing out rivals, or change NXP’s intellectual property licensing practices.

Qualcomm has told regulators it will not acquire NXP’s standard-essential patents, which the Dutch company can sell to another buyer, the sources said.

The company also agreed not to take legal action against third parties related to NXP’s near field communication (NFC) patents except for defensive purposes. NXP co-invented NFC chips which enable mobile phones to be used to pay for goods and store and exchange data. Qualcomm also offered an interoperability pledge, allowing rival products to function with NXP’s products.

The Commission has told rivals and customers to provide feedback to the offer by the end of the week. It can demand more if the feedback is negative.

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