MW Qualcomm's interest in buying rival Intel is reportedly fading
By Mike Murphy
Semiconductor maker Qualcomm Inc.'s interest in acquiring rival Intel Corp. is souring, Bloomberg News reported Monday night.
In September, the Wall Street Journal reported Qualcomm $(QCOM)$ had approached Intel $(INTC)$ about a takeover, in what would have been among the largest tech mergers in recent years.
But the complexities of a potential deal have cooled Qualcomm's interest, according to Bloomberg, citing unnamed sources familiar with the matter. Bloomberg reported it's still possible Qualcomm could be interested in buying parts of Intel, or could revive its interest in a full acquisition at a later date.
Qualcomm did not immediately respond to a request for comment.
Last week, Qualcomm laid out plans to diversify its business in the coming years, with a goal of generating an additional $22 billion in annual revenue by 2029. Chief Executive Cristiano Amon said in an interview on Bloomberg News that "at this time, we have not identified any large acquisition that is necessary" to meet that increased revenue goal.
Intel, which once dominated the chip industry, has stumbled in recent years and has fallen behind its rivals in making lucrative AI chips. In August, the company announced a $10 billion cost-cutting plan, including a reduction in capital expenditures, laying off 15% of its workforce and the suspension of its dividend.
Earlier this month, Intel lost its spot in the Dow Jones Industrial Average DJIA to booming AI chipmaker Nvidia Corp. $(NVDA)$, further indicating a changing of the guard in the chip industry.
Wall Street has been wary of Qualcomm's potential purchase of Intel from the start. Bernstein's Stacy Rasgon said in September that the deal looked "very risky to us given uncertain returns," while expressing doubt that Intel would be "desperate enough" to sell. Analysts also warned that such a deal could overleverage Qualcomm, sending its bonds to junk status.
Intel stock has sunk about 50% year to date. As of Monday's close, the company's market cap was about $106 billion. Qualcomm's shares are up around 10% this year, and its market value is about $174 billion.
-Mike Murphy
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 25, 2024 23:03 ET (04:03 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments