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Qualcomm in Talks to Explore Intel Acquisition, Sources Say

By  |  September 22, 2024

Qualcomm has initiated discussions with Intel about a potential acquisition, a source familiar with the matter revealed on Friday. The deal, which could significantly reshape the technology sector, faces numerous challenges but has sparked interest within the industry. According to Reuters, Qualcomm CEO Cristiano Amon is leading the negotiations, which are still in the early stages.

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    Per Reuters, Amon has been exploring various options for a possible acquisition of Intel, a chipmaker with over five decades of history. Earlier this month, Qualcomm was reported to have shown interest in parts of Intel’s design business, specifically its PC design unit, though executives have been evaluating the company’s entire business portfolio. Despite these efforts, Qualcomm has yet to submit a formal offer, and the discussions remain confidential, according to a third source.

    Intel, once the world’s most valuable chipmaker, has seen a sharp decline in its fortunes, with shares losing nearly 60% of their value since the beginning of the year. Qualcomm’s approach comes at a vulnerable moment for Intel, potentially positioning the San Diego-based company to capitalize on Intel’s weakened position.

    Related: Qualcomm Loses Legal Battle Over EU Antitrust Fine, Court Slightly Reduces Penalty

    The prospect of a deal has already affected market movements. Intel’s stock rose 3.3% after the news, while Qualcomm saw a 2.9% drop in its share price. However, should a formal bid materialize, the acquisition is expected to face regulatory scrutiny from antitrust authorities in the U.S., Europe, and China. Qualcomm might be required to divest some of Intel’s assets to clear these hurdles.

    If the acquisition attempt moves forward, it could mark one of the largest in tech history. Qualcomm’s pursuit of Intel echoes the 2018 takeover attempt by Broadcom, which sought to acquire Qualcomm for $142 billion. That deal was ultimately blocked by then-President Donald Trump due to national security concerns.

    As the discussions continue, both companies remain tight-lipped, and it remains to be seen whether a formal offer will emerge or if regulatory concerns will hinder any potential agreement.

    Source: Reuters