Once considered to be a major force in Silicon Valley, Intel (
INTC) in recent times has been marred with technological and
financial struggles. It has prompted thousands of layoffs, a suspension of its dividend, and a pause in factory projects amid a costly foundry buildout. Shares of the company have even lost over half of their value in 2024, so it's no surprise that rivals are looking to scoop up some company assets at cheaper prices.
Word on the Street: Reports have surfaced that Qualcomm (
QCOM) has approached Intel about a
potential takeover. While a deal is said to be far from certain, a transaction like this could benefit from the billions in government grants and low-cost loans lined up for Intel, but face scrutiny from antitrust regulators. If not the entire company, Qualcomm is also said to have been considering various parts of Intel's design operations, particularly its client PC design division.
That's not all. Apollo Global Management (
APO) seems to have thrown its hat in the ring as well. According to Bloomberg, Apollo has offered to
invest about $5B into Intel, with the latter currently considering the proposal. Broadcom's (
AVGO) name has also come up, with advisors continuing to consider
potential bids for the chipmaker to make the most of the current situation.
Good idea? "Antitrust concerns exist but may be manageable, particularly if the foundry business is spun off as planned," Kumquat Research writes in
Intel And Qualcomm: A Solid Merger Match. "Aside from the unrealistic $90B price tag, the merger is likely to encounter significant regulatory, financial, and integration challenge," counters KM Capital, pointing to
discounted cash flow. "I do not want to be boastful, but Intel's stock has lost more than 30% of its value since I have shared my
'Strong Sell' recommendation back in May."
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