Acquisitions |
6 Months Ended |
|---|---|
Mar. 27, 2022 | |
| Business Combinations [Abstract] | |
| Acquisitions | Acquisitions Nuvia. On March 16, 2021, we completed the acquisition of NuVia, Inc. (NUVIA) for $1.1 billion (net of $174 million cash acquired), substantially all of which was paid in cash. In connection with the acquisition, we assumed or replaced unvested NUVIA stock awards with Qualcomm stock awards with an estimated fair value of $258 million, which have post-acquisition requisite service periods of up to four years. NUVIA has certain in-process technologies and is comprised of a CPU (central processing unit) and technology design team with expertise in high performance processors, SoC (system-on-chip) and power management for compute-intensive devices and applications. Upon completion of development, NUVIA’s technologies are expected to be integrated into certain QCT products. We recorded $885 million of goodwill, which is not deductible for tax purposes and was allocated to our QCT segment for annual impairment testing purposes. Goodwill is primarily attributable to assembled workforce and certain revenue and cost synergies expected to arise after the acquisition. We also recorded a $247 million in-process research and development intangible asset related to a single project, which is expected to be completed in fiscal 2023 and, upon completion, will be amortized over its useful life, which is expected to be seven years. Our results of operations for fiscal 2021 included the operating results of NUVIA since the acquisition date, the amounts of which were not material.
Veoneer. On October 4, 2021, we and SSW Partners, a New York-based investment partnership, entered into a definitive agreement (the Merger Agreement) to acquire Veoneer, Inc. (Veoneer) for $37.00 per share in cash. The transaction closed on April 1, 2022 (the Closing Date). Total cash consideration payable in the transaction, inclusive of (i) approximately $4.6 billion for amounts paid in respect of Veoneer’s outstanding capital stock and equity awards and amounts to be paid to settle Veoneer’s outstanding convertible senior notes due 2024; and (ii) the $110 million termination fee paid to Magna International Inc. (Magna) in the first quarter of fiscal 2022, was approximately $4.7 billion. On the Closing Date, SSW Partners acquired all of the outstanding capital stock of Veoneer, shortly after which it transferred Veoneer’s Arriver business to Qualcomm. We intend to incorporate Arriver’s computer vision, drive policy and driver assistance technologies into our Snapdragon automotive platform to deliver an integrated software SoC ADAS (advanced driver assistance systems) platform for automakers and Tier-1 automotive suppliers. SSW Partners retained Veoneer’s Tier-1 automotive supplier businesses, primarily consisting of the Active Safety and Restraint Control Systems businesses (the Non-Arriver businesses), which it intends to sell in one or more transactions.
We funded substantially all of the cash consideration payable in the transaction in exchange for (i) the Arriver business and (ii) the right to receive a majority of the proceeds upon the sale of the Non-Arriver businesses by SSW Partners. We have also agreed to provide certain funding of approximately $300 million to the Non-Arriver businesses while SSW Partners seeks a buyer(s). Such amounts, along with cash retained in the Non-Arriver business, are expected to be used to fund working and other near-term capital needs, as well as certain costs incurred in connection with the close of the acquisition.
Although we do not own or operate the Non-Arriver businesses, we have determined as of the Closing Date that we are the primary beneficiary, within the meaning of the Financial Accounting Standards Board (FASB) accounting guidance related to consolidation (ASC 810), of these businesses under the variable interest model. Accordingly, we will consolidate the Non-Arriver businesses on a one-quarter reporting lag starting from the Closing Date until such businesses are sold by SSW Partners. We expect to present the assets and liabilities of the Non-Arriver businesses as held for sale and its operating results as discontinued operations. We also expect to initially use a one-quarter reporting lag to consolidate the Arriver business within our consolidated financial statements, until certain integration activities are complete, which are expected to occur in the fourth quarter of fiscal 2022.
In accordance with the Merger Agreement, we paid to Magna a termination fee of $110 million in the first quarter of fiscal 2022 on behalf of Veoneer in connection with the termination of the previously announced agreement and plan of merger, dated as of July 22, 2021, by and among Magna and Veoneer. The termination fee was recorded in other noncurrent assets as advanced consideration for the acquisition at March 27, 2022 and was classified as cash used by investing activities in the condensed consolidated statements of cash flows in the six months ended March 27, 2022.
Our initial accounting for this business combination is currently underway. We expect to record and disclose the preliminary purchase price allocation in the third quarter of fiscal 2022.
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