Alexei Oreskovic
SAN FRANCISCO -- Intel(INTC Quote - Cramer on INTC - Stock Picks) is becoming a dream client for antitrust lawyers.
On Thursday, the chipmaker disclosed that government regulators have asked it for more information regarding its planned joint venture with STMicroelectronics(STM Quote - Cramer on STM - Stock Picks) to form a flash memory company. The so-called second request issued by the U.S. Federal Trade Commission is a rare step by the government, and an expensive wrinkle in Intel's plans. And in the wake of the European Commission's recent decision to bring charges against Intel, it represents the latest antitrust predicament to cast a shadow on the world's No.1 chipmaker. Unlike the European charges, which involve Intel's allegedly abusive business practices against rival Advanced Micro Devices(AMD Quote - Cramer on AMD - Stock Picks), the FTC's action relates only to Intel's joint venture with STMicro. The deal combines Intel's money-losing NOR flash memory business, with STMicro's NOR and NAND flash assets. The new company will boast $3.6 billion in combined revenue and is expected to be the No.1 player in NOR flash memory. Second requests by the FTC are extremely unusual, accounting for 1% or 2% of all deals, according to an antitrust lawyer at a well-known firm. Generally, it means that after talking to the companies' customers, the government has certain concerns about the deal's effect on competition. While the request can require producing millions of documents and cost millions of dollars, it's hardly a guarantee that the government will seek to block the deal in court.
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