Qualcomm, the California-based chipmaker, has expressed interest in a friendly takeover of Intel, as reported by Bloomberg based on information from unnamed sources. This potential move could lead to one of the largest mergers and acquisitions in history.
Qualcomm, with a market value of approximately $188 billion, has recently approached Intel, which has a market value of about $93 billion, to discuss a potential acquisition. The Wall Street Journal reported on Qualcomm’s interest on Friday, leading to an increase of more than 3% in Intel’s stock price on Wall Street. Both Qualcomm and Intel have declined to comment on the matter.
The proposed acquisition is described as a friendly takeover, indicating that Qualcomm is seeking an agreement that would be acceptable to Intel’s management. Qualcomm’s initial proposal involves acquiring the entire company, although the company has not ruled out the possibility of buying or selling specific parts of Intel.
The outcome of this initial approach remains uncertain, and any potential deal would likely face rigorous scrutiny from antitrust authorities, a process that could be lengthy. Qualcomm’s interest in Intel comes at a time when the latter is experiencing its most challenging period in its 56-year history. Under the leadership of CEO Pat Gelsinger, Intel is implementing a turnaround plan aimed at reforming the company and boosting its flagging stock price.
Despite Gelsinger’s confidence in the turnaround plan, he is open to considering alternative transactions, according to the sources. Intel is currently heading towards its third consecutive year of declining sales, with estimated revenues of $52 billion in 2024, which is significantly lower than the $74 billion it generated in 2021. Recent announcements, including a multibillion-dollar deal with Amazon Web Services to develop custom AI semiconductors and plans to separate its foundry operations, have sparked some optimism in Gelsinger’s turnaround strategy.