Qualcomm backs off full Intel acquisition, could consider buying select divisions

In brief: It appears that what could have been one of the largest and most disruptive tech acquisitions in history is not going to happen any time soon, if at all. A new report claims that Qualcomm's interest in acquiring struggling Intel has cooled, partly due to the complexities of such a deal.

In September, reports claimed that Qualcomm had made a takeover offer to rival Intel. The proposal arrived as Team Blue lurched from one crisis to another, from its poor financial performance leading to mass layoffs and cost-cutting, to the problems with its foundry business and the Raptor Lake disaster.

Intel's stock price was slightly above $19 in August, down 74% from the all-time high of just under $73 four years earlier. Intel's fortunes hit a nadir earlier this month when Nvidia replaced it in the Dow Jones index.

In October, it was reported that Qualcomm had decided to wait until after the US election before deciding if it should pursue its acquisition of Intel. Such a massive deal would undoubtedly face intense scrutiny from regulators, both domestically and globally. The company wanted to see how the next administration's policies affect factors that could impact the acquisition, such as antitrust rules and US-China relations.

Now, Bloomberg reports that Intel's appeal is waning in the eyes of Qualcomm. According to the publication's sources, the complexities of the deal are making the acquisition less enticing, but it is possible that the company could look at acquiring pieces of Intel or rekindle its interest at a later date. Qualcomm reportedly explored acquiring portions of Intel's design business before considering the purchase of the entire company.

Largest tech acquisitions in recent history

Rank	Acquirer	Acquisition	Value (in Billion USD)	Year
1	Microsoft	Activision Blizzard	75.4	2023
2	Broadcom	VMware	69	2023
3	Dell	EMC Corporation	67	2016
4	AMD	Xilinx	49	2022
5	SoftBank	ARM Holdings	31.4	2016
6	IBM	Red Hat	34	2019
7	Elon Musk	Twitter	44	2022
8	Salesforce	Slack	27.7	2020
9	Microsoft	LinkedIn	26.2	2016
10	Facebook	WhatsApp	19	2014

Intel currently has a market cap of $107.26 billion, almost half of Qualcomm's $176 billion valuation. An acquisition would exceed the $69 billion Broadcom paid to acquire VMware in November 2023 and the $75.4 billion Microsoft paid for Activision Blizzard. This means every detail would be under the spotlight.

Qualcomm's fears of regulatory hurdles are well-founded. In 2022, Nvidia walked away from its $40 billion acquisition of Arm, which it had initially announced in 2020. The company said that the intense regulatory scrutiny the deal faced prevented the transaction from being completed.

Permalink to story:

Qualcomm backs off full Intel acquisition, could consider buying select divisions

I think most buyers would only want their fabs. Qualcomm was one of the few companies that could have use for buying intel's standing contracts and patents to be able to build x86 but at this point because of the prominence of Linux on the datacenter, x86 isn't as essential to the future at this point: I do think it's going to be a must for personal computers still simply because it will be a good long while before stuff like gaming consoles and game development transitions away from x86 now, but outside of that the future is looking more and more like you just virtualize x86 if you must have it but mostly leave all infrastructure to "cloud" providers.

I think the regulators would allow intel to sell its fabs to another American company. Probably under some special term that intel would have priority or whatever.