Intel is mulling a range of acquisition targets, including a bid for Broadcom, and could be spurred into action should the latter’s proposed takeover of Qualcomm look likely to succeed.
Citing unnamed sources, The Wall Street Journal (WSJ) reported Intel is closely monitoring Broadcom’s takeover battle for Qualcomm and is wary such a tie-up would pose a serious threat to its own business. Should Broadcom’s bid, which has so far been spurned by Qualcomm, look likely to succeed, WSJ sources said Intel could make its own offer to acquire Broadcom.
The WSJ sources said Intel began considering a move for Broadcom in late 2017: notably, Broadcom launched its takeover bid for Qualcomm in November.
WSJ added there was no guarantee Intel would make a bid, even if Broadcom is able to reach a deal for Qualcomm, while noting the complexity of an Intel/Broadcom tie-up would be vast.
Broadcom’s market value reportedly stands at $104 billion.
Reports Intel could enter the fray adds to what had already been almost six months of drama between Broadcom and Qualcomm. The companies have been embroiled in a well-publicised tit-for-tat regarding the takeover, which turned hostile after Broadcom moved to nominate new members to Qualcomm’s board, in an attempt to force through a takeover after its initial bid was rejected.
Indeed, WSJ added Intel could decide to pursue other targets even if Broadcom manages to secure the acquisition.
At the same time as fending off Broadcom’s advances, Qualcomm is also attempting to secure its own acquisition of NXP Semiconductors.
Intel currently battles Qualcomm in the area of smartphone chips, where the latter has been a dominant player for years. Intel was, however, able to secure a contract with Apple and is reportedly working on a deal to become a main supplier for its future iPhones.
Qualcomm supplied chips for Apple products for several years, but a recent licensing battle soured relations between the two. Should Broadcom succeeded in its bid for Qualcomm, there is a potential it could strengthen relations with Apple, and thus negatively impact Intel.
WSJ did not report on what other acquisition targets Intel is apparently looking at.