A new takeover offer from the Intel Group and another categorical refusal from the Board of Directors.
In the midst of a turmoil the likes of which the company has never experienced since its creation in 1969, Intel has been experiencing one bad news after another for several months... not to say years. A few weeks ago, the publication of its financial results for the second fiscal quarter 2023/2024 confirmed the difficulties faced by the American group, which reported a sharp drop in sales and, even more seriously, losses, despite its habit of presenting investors with an idyllic picture. The punishment was immediate, with a remarkable fall in the company's share price. In response, Intel immediately announced a vast redundancy plan - the biggest in its history - with over 15,000 jobs to be eliminated by the end of 2024.
ARM's capitalization now far exceeds Intel's © Bloomberg
Reducing the workforce and the inherent costs was only part of the solution put forward by Pat Gelsinger and his team, however, since in the wake of this a rescue plan was announced with, for example, the sale of Altea, purchased in 2015 for the modest sum of $16.7 billion. Lastly, the US company's board of directors announced the reorganization of Intel Foundry, its largely loss-making foundry division, into an independent entity, albeit still integrated into the group. All eyes are on Intel Foundry, because if we take this department out of the equation, the Intel Group's results are far from bad.
Not surprisingly, some of the companies interested in taking over Intel are putting Intel Foundry on the back burner. We didn't have this kind of information about Qualcomm's offer a few days ago. However, the proposal made by ARM last week clearly mentioned Intel Foundry. Relayed by Bloomberg, the offer in question focused solely on Intel's research and development activities. The British company ARM had specified that it was not interested in Intel's production segment, as it was accustomed to having its chips produced by the Taiwanese company TSMC.
Rene Haas, ARM CEO © ARM
That said, with or without Intel Foundry, Intel's response seems likely to be the same, and Pat Gelsinger clearly has no intention of selling the company of which he remains CEO. Time will tell, of course, if the financial world gives him the time he needs, but the CEO is determined to see his rescue plan through and get Intel back on track.
