The competition authorities in the US, Europe and the UK will have to sanction the takeover.
The Wall Street Journal’s reports on Qualcomm’s acquisition of Intel has put the entire semiconductor industry in shock. After all the hullabaloo in regards to the acquisition, fresh reports now surfaced that the much-anticipated deal is far from the reality and even if it happens, it will change the entire tech industry globally. The preposterous headline “Qualcomm wants to buy Intel” has probably tarnished the image of the world’s most reputed business daily.
Cory Johnson, Futurum Group chief market strategist, explained on a Yahoo Finance podcast that acquisition is very common in the corporate world, but this is not a very large organization purchasing a very small one. This takeover will completely change the dynamics of the global chip sector and is going to be the semiconductor industry’s biggest deal ever. Qualcomm and Intel are the world’s top five semiconductor companies with the former being the leading fabless firm.
Even though the takeover is far from the reality, analysts stated that Qualcomm is in a much better position as Intel’s market shares slumped by 57 percent year-to-date and is very well-known for its fiscal struggles. Intel is worth $93 billion, while Qualcomm is around $188 billion worth market. But Intel employs 1,00,000 people, while the latter provides 50,000 employment. Therefore, if Qualcomm wants to buy Intel, it will have to acquire all the chip factories, research facilities and plots of land.
Media reports also appeared that Qualcomm intends to acquire the PC design division of Intel. The acquisition report is completely baseless because Qualcomm is not that financially secured to buy Intel and all its subsidiaries. A stock-for-stock merger is definitely possible because in that case Intel’s shareholders will exchange their stakes for Qualcomm shares. In fact, the acquisition will erode the current x86 license agreement with AMDand also the competition authorities in the US, Europe and the UK will have to sanction the takeover. Previously, the competition authorities also rejected Nvidia’s acquisition proposal of Arm.
