In context: With Intel struggling, companies are either aiming to acquire Team Blue outright or bid for parts of it. While Intel remains dedicated to its turnaround strategy, some of the offers underscore how significantly Intel’s fortunes have declined. A notable example is Arm’s attempt to purchase Intel’s premium assets, which Intel unsurprisingly rebuffed.
According to Bloomberg, referencing a source with direct knowledge, Arm proposed acquiring Intel’s product division that develops chips for PCs, servers, and networking equipment. However, Intel refused, indicating that this division is not for sale. Arm was specifically uninterested in Intel’s foundry assets.
Over the past year, Intel’s rapid decline has made it a target for acquisition speculations. For example, Qualcomm recently made a takeover proposal earlier this month, according to sources familiar with the details.
Meanwhile, Intel seems open to selling off portions of its operations to stabilize financially. Among the assets possibly up for sale is its programmable chip division, Altera, which it acquired for $16.7 billion in 2015. CEO Pat Gelsinger, however, recently stated that such a sale is not part of Intel’s plan.
Sandra Rivera from Intel mentioned that the company is adhering to its original strategy to divest a smaller portion of its stake in Altera, aiming to complete the spin-off through an initial public offering by 2026 at the latest. Last year, Intel spun off Altera as an independent entity with IPO plans in the future.
Arm’s potential acquisition of Intel’s product units could have supported its strategy to expand into the PC and server markets, where Intel’s chip designs are dominant. The UK-based company also aims to offer fully developed products, which Intel could have facilitated.
However, the deal was not practical for Intel. The company is already executing its own strategies to rejuvenate its operations, making it less inclined to sell off a core business line. Additionally, Intel has other options: Apollo recently expressed willingness to make an equity-like investment of up to $5 billion in Intel. Pending approval, Intel is also set to receive $8.5 billion in grants and $11 billion in low-interest loans through Chips Act funding from the government.
An Arm takeover of Intel’s product division would have faced numerous hurdles. The deal would likely have attracted heavy scrutiny from regulatory bodies, especially amid current trade tensions with China. Despite Arm’s higher market capitalization, Intel’s revenue dwarfs Arm’s, making such an acquisition improbable. Given the scale of Intel’s product divisions, it’s doubtful Arm could manage such a large purchase financially.
Another challenge would be merging Arm’s RISC-based architecture with Intel’s x86 architecture. Additionally, Arm’s clients—including Amazon, Qualcomm, and Samsung—would likely have protested the deal, as it would position Arm to compete directly with them.
