(Bloomberg) – Qualcomm (QCOM) will likely wait until after the U.S. presidential election in November before deciding whether to move forward with its proposed acquisition of Intel (INTC), people familiar with the matter said.
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San Diego-based Qualcomm is seeking more clarity about the new White House occupier before deciding its next move, considering the future administration’s impact on the antitrust situation and U.S. relations with China, according to people familiar with the matter. I would like to have it done. It has been determined that confidential information is being discussed.
Some of the people said Qualcomm will choose to wait until after the new US president takes office in January to decide what to do because there are many complexities involved in any deal that could involve Intel. It is said that there is a possibility.
The Qualcomm-Intel merger, whose products are key to the digital framework that underpins everyday life from smartphones to electric cars, will almost certainly come under intense scrutiny from antitrust regulators in the U.S. and around the world. Dew. That includes China, a key market for Qualcomm and Intel.
Qualcomm made a preliminary approach to Intel in September about a possible acquisition of its struggling rival. That month, the company informally contacted China’s antitrust regulators to gauge their stance on the potential deal, some of the people said. Qualcomm has not received any feedback from Chinese authorities, who are waiting to confirm whether the company will indeed make a formal bid.
Intel is at the center of the U.S. government’s plan to revive domestic semiconductor manufacturing, making political support essential for any deal. The Biden administration has consistently emphasized the importance of chip manufacturing policy from a national security perspective. Intel is on track to receive the largest allocation of funding under the Chip and Science Act in 2022 if all its factory construction plans go ahead. Qualcomm is in talks with U.S. regulators and believes consolidation across the U.S. could alleviate concerns, people familiar with the matter previously said.
A post-election bid could have other benefits for Qualcomm. Intel is scheduled to release third-quarter financial results later this month. If it follows the pattern of its disappointing announcement three months ago and its impact on potential target companies’ stock prices, the deal could be quite cheap for Qualcomm. Once again, analysts expect Intel’s net loss to exceed another $1 billion.
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Qualcomm’s discussions are ongoing, but it is unclear whether the company will decide to move forward with its bid for Intel, and the timing is subject to change, the people said. Representatives for Qualcomm and Intel declined to comment, while China’s State Administration for Market Regulation did not respond to requests for comment.
Under CEO Pat Gelsinger, Intel has undertaken an expensive plan to reinvent itself and bring in new products, technology and outside customers. As part of a recently announced reorganization, Intel plans to turn its programmable chip division into a separate business and either sell stock to the public or seek investors.
Bloomberg News reported last month that Apollo Global Management has offered Intel a multibillion-dollar investment that would give the chipmaker a vote of confidence in its turnaround strategy and put it at risk of an acquisition by Qualcomm. It may be an alternative option.
—With assistance from Liana Baker, Ian King, and Zheng Wu.
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