Qualcomm said it would wait for the US election to decide on Intel’s move

(Bloomberg) — Qualcomm Inc. (QCOM) will likely wait until after the U.S. presidential election in November before deciding whether to pursue a bid to buy Intel Corp. (INTC), people familiar with the matter said.

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San Diego-based Qualcomm wants more clarity about the new owner of the White House before deciding its next move, given the impact any future administration would have on America’s antitrust landscape and relations with China, according to people who didn’t know wanted to be identified discussing confidential information.

Some respondents said Qualcomm may choose to wait until after the inauguration of the new U.S. president in January to decide how to proceed because of the complexity of a potential deal with Intel.

A combination of Qualcomm and Intel, whose products are central to the digital framework of everyday life – from smartphones to electric vehicles – would almost certainly attract intense scrutiny from antitrust regulators in the US and around the world. This also includes China, a key market for both Qualcomm and Intel.

Qualcomm gave Intel a preliminary statement in September about a possible takeover of the troubled competitor. That same month, the company made informal inquiries to antitrust regulators in China to gauge their stance on a potential deal, some people said. Qualcomm has not received any feedback from Chinese authorities, who are waiting to see whether the company actually makes a formal offer, it said.

Intel is at the heart of the U.S. government’s plan for a domestic chip manufacturing renaissance, making political support crucial to any deal. The Biden administration has consistently outlined the importance of its chipmaking policies in terms of national security. Intel is poised to receive the largest funding allocation under the 2022 Chips and Science Act if the company follows through on all factory construction plans. Qualcomm has spoken with U.S. regulators and believes an all-American combination could allay any concerns, people familiar with the matter said previously.

Making an offer after the election could bring further benefits for Qualcomm. Intel will report third-quarter results later this month. If this follows the pattern of the disappointing announcement three months ago and its impact on the potential target’s share price, it could make the deal significantly more cost-effective for Qualcomm. This time, analysts are predicting another net loss of over $1 billion for Intel.

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Qualcomm’s deliberations are ongoing and there is no certainty that the company will choose to bid for Intel, and the timing could change, the people said. Representatives for Qualcomm and Intel declined to comment, while China’s state market regulator did not respond to requests for comment.

Under Chief Executive Pat Gelsinger, Intel has been working on an expensive plan to remake itself and attract new products, technologies and outside customers. As part of a recently announced restructuring, Intel plans to turn its programmable chip division into a standalone company and sell shares to the public or seek an investor.

Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel, Bloomberg News reported last month. This is a vote of confidence for the chipmaker in its turnaround strategy and a possible alternative to a takeover by Qualcomm.

– With support from Liana Baker, Ian King and Zheng Wu.

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