Monday, 21 January, 2019

Intel could launch bid for tech company Broadcom

Intel CEO Brian Krzanich Intel CEO Brian Krzanich Reuters Rick Wilking
Nellie Chapman | 12 March, 2018, 13:15

So says the Wall Street Journal, which claims that Intel has been pondering making an offer for Broadcom one of several options in response to the company's hostile bid for Qualcomm.

And in a further twist to an increasingly complex bid it's been suggested that Intel is looking to buy Broadcom should it succeed in its bid to acquire Qualcomm, as its concerned about the competitive threat posed by a Broadcom-Qualcomm combination.

Intel Corporation, the largest and highest valued semi-conductor chipmaker, is considering making a bid to acquire Broadcom, according to The Wall Street Journal reports.

For the past few months, Qualcomm has been trying to fend off Broadcom's unsolicited advances and has rejected multiple Broadcom bids, the most recent being for $121 billion, or $82 a share.

Intel has been considering such a move since late past year and is working with advisers, said the WSJ report. An Intel spokeswoman declined to comment on merger prospects but said the company's priority is integrating existing acquisitions.

The main issue that has always been in the way of the Broadcom-Qualcomm merger is pricing.

The company said a year ago it's buying Israeli self-driving vehicle technology maker Mobileye NV for about $15 billion.

Regulators in the USA would undoubtedly ask for industry input before approving a Broadcom and Qualcomm deal, and word is that many in the tech world are against a deal. This week, the U.S. Treasury Department ordered a 30-day postponement to Qualcomm's shareholder meeting, which was supposed to hold a vote on a slate of Broadcom board nominees.

Broadcom's bid to acquire Qualcomm - which has been rejected multiple times by Qualcomm's board of directors - faces longer odds after its raised concerns among the Committee for Foreign Investment in the United States (CFIUS), a multi-agency USA government panel that reviews potential acquisitions for US national security implications.

The multinational semiconductor company said that it was still undervalued at $121 billion after Broadcom make a revised offer to Qualcomm on February 6, up from the previously proposed deal price of $70 per share.

On the other hand, acquiring Broadcom - a market leader in wireless and Bluetooth mobile chips - could give Intel a second chance at success in the mobile market.

Broadcom (NASDAQ:AVGO) last issued its quarterly earnings data on Wednesday, December 6th.