Following SemiAccurate’s article about a takeout speculation of Intel (INTC), Citi says the most likely company interested in a wholesale takeout of Intel would be Broadcom (AVGO). Citi would view a Broadcom takeover of Intel positively as it believes Broadcom would immediately jettison the merchant foundry business and focus on microprocessors. The company would also cut expenses and make Intel a very profitable unit with operating margins in the 40’s, which would be 28% accretive to Broadcom, the analyst tells investors in a research note. However, the firm doubts the U.S. government would approve a deal given their stated interest in Intel developing a merchant foundry. It views a wholesale takeover of Intel as unlikely and reiterates a Neutral rating on the shares.
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