Published: Mon, March 12, 2018
Business | By Kate Woods

Broadcom May Be Bought Over By Intel After Finalising Qualcomm Purchase

Broadcom May Be Bought Over By Intel After Finalising Qualcomm Purchase

"Intel considering a range of acquisition alternatives in reaction to Broadcom Ltd.'s hostile pursuit for Qualcomm Inc. that could include a bid for Broadcom", Wall Street Journal reported on Saturday.

Intel, the world's second-largest semiconductor maker, is keeping a close eye on the $117 billion takeover battle and is eager for Broadcom to fail, because the combined company would pose a competitive threat, the Journal reported. It says that Intel has been working with advisors since late last year to formulate an acquisition strategy to offset Broadcom's bid, which if ultimately successful would further redraw a semiconductor industry landscape already undergoing drastic changes as a result of a wave of mega-consolidation over the past few years.

This latest twist in Broadcom's efforts to acquire Qualcomm comes after the Committee on Foreign Investment in the United States (CFIUS) has raised concerns about the deal, claiming it would put U.S. national security at risk.

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CHIPMAKER Intel is reportedly so unnerved by the prospect of a Broadcom/Qualcomm merger that it's considering, er, acquiring Broadcom. Another source told WSJ that Intel may possibly decide to go after smaller companies for acquisitions.

The main issue that has always been in the way of the Broadcom-Qualcomm merger is pricing.

Intel has been considering such a move since late previous year and is working with advisers, said the WSJ report. At least, that would be the case if the deal exists: Intel, naturally, has refused to comment on what it describes as rumours and speculation, while both Qualcomm and Broadcom have been silent on the matter.

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The Committee on Foreign Investment in the United States (CFIUS) has ordered a national security review of the takeover. It said it will maintain Qualcomm's 5G research and development resources and it pledged to create a new $1.5 billion fund to "train and educate the next generation of engineers in the U.S." to "ensure America's lead in future wireless technology".

Intel a year ago finished second in global semiconductor sales with revenue of $62.8 billion.

Broadcom (NASDAQ:AVGO) last issued its quarterly earnings data on Wednesday, December 6th.

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Should the deal between Broadcom and Qualcomm fall through, Intel's attempt to try and acquire Broadcom would help the company add a host of smartphone chips, as well as Bluetooth and Global Positioning System components.

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