Rumors about Qualcomm’s intentions to buy the entire Intel company arose back in September, immediately after the processor giant published a disastrous quarterly report and statements about the need to cut about 15% of its staff. As Bloomberg notes, having immersed itself in studying the conditions necessary to implement such a deal, Qualcomm has recently cooled down considerably on the very idea of buying Intel.
Image Source: Intel
On the way to implementing this transaction, a number of organizational, regulatory and financial obstacles arise. In particular, it would be difficult for Qualcomm to manage its chip manufacturing business, which currently generates billions of dollars in quarterly losses for Intel. Secondly, the deal between the companies is unlikely to receive approval from the antitrust authorities of individual countries, namely China. Finally, Intel’s debt load is measured at $50 billion with a capitalization of just over $100 billion, and to buy the company you just need to get a decent amount from somewhere.
Qualcomm executives recently admitted that the company expects to grow $22 billion in annual revenue by 2029 from new market segments, but CEO Cristiano Amon admitted in an interview with Bloomberg last week that he doesn’t see the acquisition targets needed to achieve a corresponding increase in revenue within the specified time frame.
Intel management also expresses its readiness to develop its business areas, but while maintaining the structural unity of the company. “We believe in being separate, but we believe it’s better to act together as part of a strategy,” explained CEO Patrick Gelsinger. As Bloomberg notes, now Qualcomm can either focus on trying to buy some part of Intel’s assets, or return to the idea of acquiring the entire company at a later period. In turn, Intel is determined to find investors for its subsidiary Altera, but not to part with it completely.