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As Broadcom’s acquistion of Qualcomm is blocked, will Intel now show interest?

I suggested the other day that the Qualcomm-Broadcom ‘will they, won’t they?’ acquisition was set to run and run. But I have been proven wrong by the intervention of US president Donald Trump, who concluded that such a deal would ‘impair the national security of the US’.

While blocking the acquisition of a defence specialist could be readily understood, the reason for pulling the plug on this particular deal is less obvious.

One explanation appears to be inherent suspicion of Broadcom amongst the ‘powers that be’ in the US. It has been an aggressive acquisitor over the recent past, but has not been afraid to sell off some of the things it doesn’t want. Might the US be worried that something acquired with the purchase of Qualcomm be sold off – and that ‘something’ might be significant?

Born in 2005 following the private equity acquisition of what was Agilent’s Semiconductor Products Group, Avago bought Broadcom in 2016 and assumed that company’s name. While it has been headquartered in Singapore – from where it has been driven with some determination by its president and CEO Hock Tan – it recently announced that it would move its headquarters to the US. Some interpreted this as an attempt – seemingly unsuccessful – to soften its perception by US regulators.

So it’s back to ‘business as usual’ for Qualcomm. But having now been exposed as a potential acquisition target – and potentially amenable to such a deal – will Qualcomm now be in another company’s sights? And could that company be Intel?

Graham Pitcher

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