Intel might make offer for Broadcom in bid to thwart Qualcomm takeover

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Intel may make an offer to buy Broadcom according to the Wall Street Journal. Sarah Tew CNET

Intel is reportedly so discomfited by the prospect of a combined Broadcom and Qualcomm that it will consider buying Broadcom to stop the transaction.

Broadcom, which has made a bid of $117 billion for Qualcomm, is now facing an increasingly complex battle that includes: regulatory approvals and worries over China's influence on global mobile networks as it looks to acquire one of the world's leading chipmakers. One source told the Journal that it would be unlikely. The purchase has been on the discussion table for Intel since past year, and according to the Journal, Intel is working with advisers to see if the purchase makes sense.

The main issue that has always been in the way of the Broadcom-Qualcomm merger is pricing. 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. The WSJ also reports that Intel could be looking at other options as well such as smaller acquisitions to remain competitive.

If Broadcom buys Qualcomm, Intel would face a much bigger competitor, almost equal to itself in market heft. Intel acquired autonomous vehicle technology firm Mobileye previous year and acquired programmable chip maker Altera in late 2015.

Intel has responded to a news report that it is considering a possible bid for Broadcom by saying that it is focused on integrating previous acquisitions, raising doubt over the idea.

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Intel, which makes semiconductors for data center servers and personal computers, is the larger of the three companies and has a $244.2 billion market capitalization.

Singapore-based Broadcom's US$117 billion bid for Qualcomm faces concerns by U.S. regulators anxious about potential Chinese influence on the company and United States ability to influence the creation of the next generation of mobile networks, called 5G.

This report comes at a time when Broadcom's attempt to buy Qualcomm is said to be in jeopardy as the US Treasury's Committee on Foreign Investment (CFIUS) outlined concerns it had about the transaction. 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".

Broadcom has not yet commented on the issue.

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