Qualcomm Said to Wait for US Election to Decide Intel Move

Qualcomm Inc. may wait until the U.S. presidential election in November before deciding whether to pursue a proposal to buy Intel Corp., people familiar with the matter said.

San Diego-based Qualcomm wants more clarity on the new occupant of the White House before deciding on its next move because of the impact any future administration will have on the antitrust landscape and U.S. relations with China, according to the people who did not know it. Had sought to be identified while discussing confidential information.

Some said that given the many complexities of a potential transaction involving Intel, Qualcomm may choose to wait until the inauguration of the new US president in January before deciding how to proceed.

The combination of Qualcomm and Intel, whose products are critical to the digital infrastructure that supports everyday life – from smartphones to electric vehicles – will almost certainly draw intense scrutiny from antitrust regulators in the US and around the world. This also includes China, which is a key market for both Qualcomm and Intel.

Qualcomm made initial contact with Intel in September about a possible acquisition of its struggling rival. That same month, the company fielded an informal inquiry from antitrust regulators in China to gauge their stance on a potential deal, some said. He said Qualcomm has not received any response from Chinese officials, who are waiting to see if the company actually makes a formal bid.

Intel is at the center of the US government’s plan for a domestic chip manufacturing renaissance, making political support crucial for any deal. The Biden administration has consistently underlined the importance of its chip manufacturing policy from a national security perspective. If Intel moves forward with all of its factory construction plans, it is in line to receive the largest allocation of funding under the 2022 Chips and Science Act. Qualcomm is talking with US regulators and believes a pan-US combination could address any concerns, people familiar with the matter have previously said.

Qualcomm could get other benefits from bidding after the election. Intel will report third-quarter earnings later this month. If it follows the pattern of the disappointing announcement three months ago and the impact it could potentially have on the target’s stock price, the deal could be significantly less expensive for Qualcomm. This time, analysts are predicting a net loss of more than $1 billion for Intel.

Qualcomm’s deliberations are ongoing and there is no certainty whether the company will decide to pursue an offer to Intel and the timing could change, the people said. Representatives for Qualcomm and Intel declined to comment, while the State Administration for Market Regulation in China did not respond to requests for comment.

Under Chief Executive Officer Pat Gelsinger, Intel is pursuing an expensive plan to reinvent itself and bring in new products, technology and outside customers. As part of a recently announced turnaround, Intel intends to spin off its programmable chip division into a standalone business and either sell shares to the public or seek an investor for it.

Bloomberg News reported last month that Apollo Global Management Inc. has offered to invest billions of dollars in Intel, giving the chip maker a vote of confidence in its turnaround strategy and a potential alternative to any acquisition by Qualcomm.

With assistance from Liana Baker and Ian King.

This article was generated from an automated news agency feed without any modifications to the text.