Published Date : Mar 22, 2016
It has been officially confirmed by Apple regarding its takeover talks to acquire Imagination Technologies, the struggling British chip-maker. The technology giant owns 10% stake in the smaller firm. At the stock market, apple announced that though there were some discussions regarding potential acquisition of Imagination Technologies, no offer has been made to the company right now. Before the statement came, there were speculations and reports that the two companies were in advanced negotiations regarding the takeover. Imagination Technologies manufactures chips that are used in Apple products including the iPhone. From time to time, Apple looks at potential opportunities to acquire smaller firms. It is understood that the takeover talks between Imagination and Apple have been held on several previous occasions.
Imagination Technologies Focuses on Lowering Operating Costs
Any deal to acquire Imagination Technologies would echo the takeover of PA Semi in 2008 for a staggering £195 million. The acquisition of PA Semi helped Apple to bring one of its chip suppliers in house. Imagination is valued at over £500 million at the stock market. The company has been restructuring its business after a change of chief executive and successive profit warnings. The restructuring process might involve the sale of the Pure business that makes digital radios. The struggling chipmaker has been cutting down its workforce to reduce the operating costs. The staff headcount has been reduced by 350 to lower the operating costs by £15 million by next year. The company aims to save £27.5 million by the end of the next year. Amid the reports of its potential takeover by Apple, Imagination Technologies witnessed a rise in its share prices. However, the profits were cut back soon after Apple’s confirmation regarding no deal on the table yet.