FTC Seeks Information on Intel’s Takeover Bid

Intel Corp. and Chips & Technologies Inc. said they received a request from the Federal Trade Commission for additional information on Intel’s proposed $420-million takeover of the San Jose-based specialty chip maker.

The companies said they will comply with the commission’s request. They reached agreement July 28 for Intel to buy Chips & Technologies for $17.50 a share in cash.

The agency’s request comes after some competitors expressed concern that Intel may seek to dominate sales of graphics chips, as it does the market for microprocessors. It has about 90% of that market.

Stephen Dube, an analyst at Wasserstein Perella Securities, said the FTC request is probably a routine procedural matter and that the takeover will probably be approved.

“There are other graphics chip makers, and this merger does not mean that Chips & Technologies will dominate that market,” Dube said.

Santa Clara-based Intel is the world’s largest chip maker. Its takeover of Chips & Technologies, the largest maker of graphics chips for notebook computers, would be its largest acquisition, and it could pose a tougher competitive threat to other graphics chip makers, including Cirrus Logic Inc. and S3 Inc., analysts have said.

The request also could delay the takeover. Intel said it’s “not yet in a position” to determine the date to which it will extend its offer for Chips shares. That tender offer was due to expire today, Intel said.

In Nasdaq trading, Chips & Technologies shares fell 9 cents to close at $16.97, while Intel shares rose $1.38 to close at $94.06.