One of the most consequential deals in recent years ?

Qualcomm has recently approached Intel regarding a potential takeover, according to a report from the Wall Street Journal. This move comes amid Intel's ongoing struggles in the semiconductor industry, where it has faced significant challenges, including job cuts and a notable drop in stock prices.
As of now, Intel's shares have fallen by 57% this year, making it the worst performer on the Dow Jones Industrial Average; one of the worst results in five-decade history. And Qualcomm seeks to capitalize on Intel's current struggles.

Apollo update

Apollo Global Management Inc. is reportedly preparing to make a multibillion-dollar (around 5B?) investment in Intel Corp.
The move by Apollo is seen as a positive endorsement of Intel's plans to revitalize its business
Among other benefits, accepting Apollo's investment could provide Intel with an alternative route for securing financial support without the complexities and potential drawbacks of being acquired.

Intel latest position

To give the idea, Intel has a market value of roughly $90 billion.
Intel has been attempting to pivot its business model by focusing on its chip foundry unit and enhancing its capabilities in artificial intelligence (AI) processors.
Despite these efforts, the company has struggled to maintain its market position against competitors like Nvidia.
Recent developments include signing Amazon's cloud services unit as a customer for custom AI chips, which offers some relief amid investor concerns.

Whate are the benefits ?

Even if at this stage this possible deal can be seen as a rumor, obvious one are:

• a strategic move to bolster its position in the chip market. Intel has a long-standing presence in the PC market with established relationships with major OEMs (Original Equipment Manufacturers) and enterprises.
• Strengthening AI Capabilities. Intel has been focusing on artificial intelligence (AI) and has recently launched chips aimed at improving performance in AI applications (eg. Lunar Lake).
• Asset Divestiture Qualcomm may choose to divest certain non-core segments of Intel, such as its foundry business, allowing Qualcomm to focus on its in design strengths rather than manufacturing.

Caveat

As you know, any potential deal would likely face antitrust scrutiny due to its size and implications for competition in the semiconductor space.

First Market reaction

Market Reaction: Following the news of Qualcomm's interest, Intel's stock saw a modest increase of 3.3%, while Qualcomm's shares dropped by 2.9%. This reflects investor sentiment regarding both companies' futures and the viability of such a merger.

And Qualcomm ?

Qualcomm is a cutting-edge company, a little less in the spotlight, but which over the years has been at the origin of numerous highly innovative results. Among others, Qualcomm pioneered the use of CDMA technology for commercial cell phone networks, introduced the world to 5G, etc...

Credits:
- Wall Street Journal: qualcomm-approached-intel-about-a-takeover
- Qualcomm insights: The Complete History & Strategy of Qualcomm
- Qualcomm AI example: Qualcomm power-efficient AI
- Appollo: Appollo Intel's investment