[News] Qualcomm’s Interest in Acquiring Intel Reportedly Fades due to the Deal’s Complexity

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Is one of the largest purchases in the tech industry turning into a mirage? According to the latest report by Bloomberg, Qualcomm’s interest in acquiring Intel has waned, as the challenges involved in acquiring the entirety of Intel have made the deal less appealing to the U.S. chip giant.

However, sources cited by the report did not rule out any possibilities of the deal, noting that Qualcomm could still consider acquiring parts of Intel or revisit the acquisition at a later time.

Rumors of Qualcomm exploring buying Intel have been circulating since September, while a previous report by Reuters suggested that Qualcomm is particularly interested in Intel’s PC business, though the mobile chipmaker is evaluating all of the company’s design units.

Last week, Qualcomm CEO Cristiano Amon said that the company plans to focus more on new markets such as personal computers, networking, and automotive chips to generate an additional USD 22 billion in annual revenue by fiscal 2029. Interestingly enough, he also told Bloomberg TV that at this time, Qualcomm has not identified any large acquisition necessary to achieve this goal.

In terms of the obstacles for the Qualcomm-Intel deal, the Bloomberg further notes that the proposed transaction is expected to encounter significant financial, regulatory, and operational challenges.

To start with, Qualcomm is likely to take care of Intel’s over USD 50 billion in debt, Bloomberg states. In October, the Silicon Valley company already reported a third-quarter loss of USD 16.6 billion, driven by USD 15.9 billion in charges to account for reduced asset valuations and a USD 2.8 billion restructuring expense linked to layoffs affecting over 15,000 employees, according to its press release.

Moreover, the deal, according to Bloomberg, would have likely triggered an extensive and complex antitrust review, including in China, a crucial market for both companies. In 2018, Qualcomm walked away from a USD 44 billion deal to buy NXP Semiconductors after it was unable to obtain regulatory approval from China.

In addition, Qualcomm would have needed to manage Intel’s money-losing semiconductor manufacturing unit, a sector where it has no prior experience, if the deal realizes, according to the report.

Notably, Lattice is reportedly exploring a potential bid to acquire Intel’s Altera unit in its entirety, according to sources cited by a previous report from Bloomberg.

Read more

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• [News] Qualcomm Rumored to Decide Its Next Move Regarding Potential Intel Acquisition after US Election

(Photo credit: Qualcomm)