Qualcomm Considers Friendly Takeover of Intel — Learn More About Potentially Transformative Deal for Chip Industry

Intel — once the world’s largest chipmaker — could soon be facing a friendly takeover bid from Qualcomm. Reports citing insiders suggest talks have recently begun to buy the entire company. The development comes even as the struggling company announced a series of changes this week aimed at getting its business back on track.

According to a report in the Wall Street Journal, Qualcomm has approached its rival in recent days to discuss a potential takeover. However, the talks remain in the early stages, and it is unclear whether the initial approach will lead to an agreement. A deal of this size — even if both sides were willing to do it — would likely attract the attention of antitrust regulators.

The news sent shares of Intel Corp. up 8 percent on the New York Stock Exchange Friday, while shares of San Diego-based Qualcomm fell as much as 5.5 percent.

Intel is currently facing its toughest period in about five decades, with shares down about 37% over the past 12 months. The company is heading toward a third straight year of declining sales, with estimated revenue of $52 billion in 2024 — just 70% of what it made in 2021. However, a person familiar with the situation told Bloomberg that Chief Executive Pat Gelsinger still believes the turnaround plan may be enough to remain an independent company.

The company is now valued at about $93 billion. Meanwhile, Qualcomm’s stock has surged more than 50% over the same period, reaching a market capitalization of about $188 billion. Despite recent turbulence, the acquisition would be the largest semiconductor deal in history and could potentially transform the industry.

A Bloomberg report on Saturday noted that the current proposal was for the entire company. However, Qualcomm did not rule out buying or selling parts of Intel as part of a merger. Another insider told the publication that Qualcomm has spoken to U.S. regulators and believes an all-American combination could allay any concerns.

Earlier this month, however, Reuters reported that Qualcomm executives were looking at the entire portfolio of businesses operated by Intel. The company was reportedly exploring the possibility of acquiring part of Intel’s design business—with a particular focus on its computer design unit. Chief Executive Cristiano Amon was said to have personally participated in the negotiations.

It’s unclear how such a deal would be financed by Qualcomm, though. Recent filings show the company (with a market value of $188 billion) has about $13 billion in cash. Intel, meanwhile, is valued at $122 billion and has several billion dollars in net long-term debt.

(With agency guidance)