Technology
QUALCOMM considers acquiring Intel – Offer suspended until after US elections
QUALCOMM is considering an acquisition of Intel but is delaying an offer until after the US elections.
The US semiconductor manufacturer QUALCOMM is considering an acquisition of competitor Intel, but postpones an offer until after the upcoming US elections. This decision is based on the uncertainty regarding future US economic policy and possible regulatory changes.
Mike Henry, CEO of QUALCOMM, and Catherine Raw, Chief Development Officer, met with government officials in South Africa last week, as well as with the Public Investment Corporation (PIC), the state asset manager, to discuss a possible acquisition of Intel. If QUALCOMM were to make an offer, it would exceed Intel's current market value of £2.8 billion. However, there has been no official announcement yet, as QUALCOMM wishes to await political developments following the elections.
Intel is currently in a difficult financial situation, as analysts expect a loss and declining revenues for the third quarter compared to the previous year. This situation complicates a successful acquisition, especially considering the CHIPS and Science Act of 2022, which aims to promote semiconductor production in the USA and identifies Intel as a major recipient of government subsidies.
The political orientation of the next US government, whether under Donald Trump or Kamala Harris, could be decisive in determining whether QUALCOMM's takeover attempt will be successful. A change in government could lead to stricter antitrust reviews and altered economic policy priorities, further complicating the takeover prospects.
The report from Bloomberg, which forms the basis of the plans, suggests that QUALCOMM will only consider an offer after the US elections in order to understand the new political framework. This strategy reflects QUALCOMM's cautious stance given the uncertainties in the political environment and Intel's current business development.
The shares of Intel reacted to the news with a decline of 1.35 percent, temporarily trading at 22.36 USD on the NASDAQ. This drop in price reflects investors' concerns about the decreased demand and the company's financial difficulties.
QUALCOMM must now weigh how the potential acquisition of Intel could unfold in a possibly more restrictive regulatory environment. A successful acquisition would position QUALCOMM as a leading player in the semiconductor market, but it carries significant risks regarding approvals and political support.
