According to people close to the matter, Intel has been watching the activity of Broadcom with a close eye. Broadcom’s strength would be taken to new heights if it successfully completes its acquisition of Qualcomm, so, if it goes ahead, Intel is reportedly waiting for something like this to happen so that it is able to make its own offer to acquire Broadcom, plus other acquisition alternatives if needed.
If Qualcomm Acquisition Fails, Intel Will Not Proceed to Acquire Broadcom
The latest report from The Wall Street Journal details that Intel has been eyeing this move since last year. Currently, Broadcom has a market value of around $104 billion, making it a comfortable buy for Intel. Should Intel make an offer to Broadcom, it would be the biggest acquisition made by the processor manufacturer but it is also possible that regulators make the deal go through a massive grind when it comes to approval.
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Should Broadcom succeed in buying Qualcomm, it could smooth over relations with Apple, but close a valuable opportunity for Intel in the process. However, should the bid fail, it is more than possible that Intel will stand down on acquiring Broadcom, but it will still keep a close watch on both companies and their activities. From the look of things, the tenacity of Broadcom is at its highest and does not seem to reduce at any level.
Qualcomm also happens to be a leader of chips that run apps and manage cellular communications in smartphones and competes with Broadcom in chips for short-range wireless networking, including Bluetooth and Wi-Fi, and radio filters plus other chips that condition cellular signals.
Intel was unable to compete with Qualcomm in the smartphone industry, with its chips being too power-hungry and less powerful than the competition. However, the processor manufacturer has been able to find a place in Apple’s partnership book as it supplies the tech giant with LTE chips for a portion of iPhones that are shipped.
Acquiring Broadcom would give Intel a suite of smartphone chips, which it would use to dominate the market extensively.
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It goes without saying that under the leadership of Mr. Tan, Broadcom has pursued a list of acquisitions, and it is hungry as well. The company was formed when Avago Technologies in 2015 agreed to buy the former Broadcom for roughly $37 billion and kept its name ever since.
Our honest belief is that Intel will be providing Broadcom with an offer sometime in the future since the acquisition of Qualcomm might take place in the foreseeable future.
What are your thoughts on the matter?
Source: WSJ
