Intel, Facing Threat, Considers Deals That Could Include Bid for Broadcom

Adjust Comment Print

Last month, Qualcomm updated its offer to $44bn. Sources reportedly told the WSJ that Intel has been looking into making a bid for Broadcom since late past year as a way to keep the company from acquiring Qualcomm.

Intel has been mulling a move since late past year and is working with advisers on a bid for Broadcom, which has a market value of about US$104 billion. Intel is now the largest processor manufacturer for desktops, notebooks and servers, but AMD's resurgence in the market with its Ryzen processors means that Intel will need to do better in the pricing and performance game to continue holding that dominating market share.

Qualcomm has sought assurances from Broadcom over potential antitrust issues. By swallowing Broadcom, Intel could scupper the creation of a more powerful rival that would be the world's third-largest chipmaker, after Intel itself and Samsung.

Intel had always been recognised as the world's dominant chip company, but past year Samsung claimed that crown.

Meanwhile, Qualcomm also seems to have an unlikely ally in its attempts to evade Broadcom's hostile takeover attempts.

"It is not the 5G investment that the US government should be concerned about", said McGregor.

Turkey, others hit out at Trump trade tariffs
Great country, long-term partner. "We can't even sell our farming goods in there, they totally restrict us. In Sydney, Prime Minister Malcolm Turnbull said there is no case for imposing tariffs on Australian steel.

The fallout has left the deal of buyout open for everyone.

Broadcom has since promised that if the deal goes ahead, it will set up a $1.5bn fund to "focus on innovation to train and educate the next generation of engineers in the US" and pledged to "make the United States the global leader in 5G".

Broadcom is being relentless when it comes to acquiring Qualcomm, but another company that is watching the deal with a very close eye is Intel. Broadcom hasn't revealed what exactly the relocation would entail but wants to do so to eradicate national security fears. The move could minimize CFIUS' power, with the body regulating foreign investments. While the statement was light on detail, CFIUS was happy enough to let Broadcom chow down on Brocade. That is why last November, the company announced at a ceremony with President Trump that it plans to move back to the U.S.

In other news, insider Kirsten M. Spears sold 199 shares of the stock in a transaction dated Friday, March 2nd. At that time, the Committee on Foreign Investment in the United States (CFIUS) told Qualcomm to postpone its shareholders' meeting, mentioning security reasons. That would let Broadcom redomicile by April 3, ahead of Qualcomm's rescheduled shareholder meeting.

Finally, Qualcomm's attempted acquisition of NXP also faces regulatory hurdles - mainly in China.

The US government typically weighs in on mergers and acquisitions after a deal is reached.