Intel Corp., currently amidst takeover speculation due to its financial struggles, has declined a proposal from British chip firm Arm Holdings Plc concerning its product division. According to a Bloomberg report citing an insider, Intel stated that its product division is not available for sale.
On the Nasdaq, Intel's shares rose approximately 1.5% to $24.27, while Arm saw a decline of 1.4%, trading at $147.13.
Arm, principally owned by Japan's SoftBank Group Corp., expressed interest solely in acquiring Intel's product division, which includes chips for personal computers, servers, and networking equipment. Arm had no interest in Intel’s manufacturing division, responsible for its factory operations.
Additionally, Qualcomm Inc. is reported to be planning a friendly takeover of Intel, which has been posting losses over recent quarters and anticipates further losses in the forthcoming third quarter.
Due to ongoing challenges, Intel has reportedly halted the construction of new factories in Poland and Germany and has instituted measures to downsize its real estate portfolio as part of its cost-reduction strategy.
In early April, Intel disclosed in a filing with the U.S. Securities and Exchange Commission that its semiconductor manufacturing arm, Intel Foundry, endured a heightened operating loss in fiscal year 2023. The company also cautioned that the segment's operational losses are expected to reach their peak in 2024.
Intel Foundry, comprising Foundry Technology Development, Foundry Manufacturing and Supply Chain, and Foundry Services organizations, exhibited significantly lower revenues. The newly restructured Products division, which primarily includes processors for PCs and servers, also reported weakened operating income and revenues for 2023.
Intel further indicated its aim for Intel Foundry to attain break-even operating margins somewhere between the present and the end of 2030.
Meanwhile, private equity firm Apollo Global Management Inc. has proposed an investment of up to $5 billion to support Intel’s turnaround efforts, as reported by Bloomberg earlier this week.
In June, Apollo had consented to acquire a 49% equity stake in the Fab 34 joint venture in Leixlip, Ireland, associated with Intel's chip manufacturing plant, for $11 billion.