Qualcomm’s Potential Acquisition of Intel Raises Prospects for Major M&A Deal
Photographer: Bridget Bennett/Bloomberg
Qualcomm Inc. has approached Intel Corp. regarding a potential acquisition, raising the possibility of one of the largest M&A deals in history, according to insiders.
In recent days, Qualcomm, based in California, has proposed a friendly takeover of the struggling chipmaker, although details remain confidential. While Qualcomm’s approach targets all of Intel, it hasn’t dismissed the idea of acquiring or selling parts of the company.
There is uncertainty if this initial approach will result in an agreement, and any prospective deal would face rigorous antitrust scrutiny and time-consuming regulatory processes. Qualcomm has been in talks with U.S. regulators, believing a domestic combination could mitigate concerns.
Intel is in the throes of a challenging period under CEO Pat Gelsinger, who is attempting to revitalize the company’s sagging share price and overall performance. Despite optimism about the turnaround plan, Gelsinger remains open to exploring different strategic options.
Intel’s market value has plummeted 37% over the past year to around $93 billion, while Qualcomm’s stock surged over 50%, reaching a market capitalization of approximately $188 billion. Such valuations suggest any deal would rank among the largest on record, according to Bloomberg data.
The Wall Street Journal reported Qualcomm’s interest, which boosted Intel’s shares by over 3%. Representatives for both companies have declined to comment.
While Qualcomm’s move could prompt other companies to enter the fray, Broadcom Inc. has decided not to pursue an offer at this time.
Intel is projecting its third consecutive year of declining sales, with revenue estimated at $52 billion in 2024—70% of its 2021 revenue. However, recent announcements, including a significant deal with Amazon Web Services to develop a custom AI semiconductor and plans to spin off its manufacturing business into a subsidiary, have spurred some optimism.
Separating Intel’s foundry operations aims to assure clients, including competitors, of dealing with an independent supplier.
First Published: Sep 21, 2024 | 11:39 PM IST
Original Story https://www.business-standard.com/technology/tech-news/chipmaker-qualcomm-to-explore-potential-acquisition-of-intel-report-124092100891_1.html
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