Intel weighs possible defensive bid for Broadcom, WSJreports
Intel is considering a bid for Broadcom as part of a range of acquisition alternatives in reaction to the Singapore-based chipmaker’s bid for US rival Qualcomm, the Wall Street Journal reported, citing people familiar with the matter.
Intel, the world’s secondlargest semiconductor maker, is keeping a close eye on the $117-billion takeover battle and is eager for Broadcom to fail, because the combined company would pose a competitive threat, the Journal reported. If Broadcom seems set to prevail, Intel could step in with its own offer, the newspaper reported. Intel has been considering such a move since late last year and is working with advisers, according to the Journal.
While Intel isn’t ruling out an eventual approach to Broadcom, there are no takeover discussions under way, and that outcome isn’t the most likely one, according to a person with knowledge of the matter contacted by Bloomberg who asked not to be identified discussing private deliberations.
Broadcom shares jumped as much as 8.3 per cent to $275 in extended trading in New York. The report cautioned it’s far from guaranteed that Intel would make an offer and that it could pursue smaller acquisitions instead.
Broadcom currently has a market value of about $104 billion. Its offer for Qualcomm has been met with resistance, not only from Qualcomm executives but also from the US government, which has initiated a review on national security concerns. This week, the US 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. Early indications showed that Qualcomm was on course to lose majority control of its board to Broadcom, according to information obtained by Bloomberg.
While a new vote has been scheduled for April 5, a review by the Committee on Foreign Investment in the US is likely to take longer. Broadcom is pressing ahead, vowing to cooperate with the US review and pledging to boost investment in US wireless technology to offset concerns that it would slash spending and allow foreign companies to steal the lead in the next generation of mobile technology.
Representatives of Broadcom didn’t immediately respond to a request for comment. An Intel spokeswoman declined to comment on merger prospects but said the company’s priority is integrating existing acquisitions. “We have made important acquisitions over the past 30 months — including Mobileye and Altera — and our focus is on integrating those acquisitions and making them successful for our customers and shareholders,” Intel said.
The company said last year it’s buying Israeli self-driving car technology maker Mobileye for about $15 billion. That followed the similarly sized purchase of programmable chipmaker Altera in 2015.
Broadcom is a leader in the chips that control Bluetooth connectivity and link mobile phones and other devices to WiFi networks.