A large acquisition of the company appears unlikely in the near future.
Intel, with the ticker symbol INTC, experienced a challenging week as new developments caused its share price to drop once more on Wednesday. The company’s stock decreased by 1.5% following a report indicating that a potential acquirer is adopting a cautious approach regarding a possible takeover. This decline occurred on a day when the S&P 500 index saw a positive gain of 0.5%.
The potential acquirer in question is fellow U.S. chipmaker Qualcomm. According to a Bloomberg report, Qualcomm is reportedly waiting until after the upcoming presidential election — potentially even past the January inauguration — to decide whether to continue pursuing Intel as an acquisition target.
The report, citing unnamed sources familiar with the situation, highlighted that Qualcomm’s management seeks “greater clarity” on the future leadership of the United States, particularly concerning the U.S.-China relationship and antitrust regulations.
The antitrust issue could be significant in any potential Qualcomm-Intel merger. A combined entity of these two companies would hold a dominant position in the U.S. chip sector, which could raise concerns among regulators worldwide given the global influence and power such a merger would create.
At present, both Intel and Qualcomm have refrained from commenting on the Bloomberg report. Given the early stage of any potential acquisition discussions, it is unlikely that they will make any comments soon. Investors are advised not to make trading decisions based on the possibility of this merger. The two presidential candidates present markedly different policy approaches, meaning the election outcome will significantly influence the direction of this potential acquisition.
Eric Volkman holds no positions in any of the mentioned stocks. The Motley Fool holds positions in and recommends Qualcomm and Intel, in addition to recommending specific options on Intel. A full disclosure policy is available.
