It is generally accepted that the American company Qualcomm made its first approach to acquiring Intel assets last month, and immediately turned to regulators in the US and China. Now Bloomberg reports that Qualcomm will be ready to make a second attempt to discuss a deal with Intel after the US presidential elections and the inauguration of the new head of state in January. In addition, during this time Intel may fall in price even more.
Image source: Qualcomm
There is a certain logic in such intentions, since the new US president will inevitably change the composition of the government, and representatives of regulatory authorities may evaluate Qualcomm’s likely deal to purchase Intel differently. Strictly speaking, Qualcomm does not expect any trouble from American antimonopoly officials, but China’s position in the event of a deal being agreed upon could be decisive. Such coordination will be required because both companies have a significant share of the processor market in China. The position of the new US presidential administration in relations with China may also affect the outcome of the deal being reviewed by Chinese regulators.
As Bloomberg notes, Qualcomm representatives sent their request to the Chinese antimonopoly authorities back in September, but they refrained from making a preliminary assessment of a possible deal, preferring to wait for real steps towards rapprochement from the companies. The US presidential elections will take place early next month, but the inauguration is scheduled only for January, so the potential buyer of the business will probably pause the topic of negotiations with Intel until the beginning of next year.
For Qualcomm, this expectation could turn out to be an additional benefit, because if Intel’s third-quarter report shows losses of more than $1 billion, as expected, then the capitalization of the processor maker will likely decrease, making a potential takeover less costly.
Other ways to save Intel have already been repeatedly mentioned by the media. The company will try to raise funds from institutional investors such as Apollo Global Management, find a buyer for part of the assets of the former Altera, or bring it to an IPO following the example of Mobileye, which also remains a subsidiary of Intel.