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Apple Has No Plans to Buy Chip Maker Imagination

Prompted by media reports of acquisition talks, Apple officials confirmed there had been discussions, but that there are no plans to buy Imagination.

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Apple officials have had discussions with troubled chip maker Imagination Technologies about a possible acquisition, but nothing came of the talks, and Apple has no immediate plans to make a bid.

A statement released this week by Apple to the British Stock Market came after earlier media reports based on unnamed sources indicated that was in "advanced talks" to buy Imagination in hopes of acquiring the chip maker's PowerVR GPU technology. Apple, which has used the technology in its ARM-based mobile A-Series systems-on-a-chip (SoCs), holds an 8.5 percent stake in Imagination.

The reports gave Imagination's stock price a significant boost, which apparently prompted Apple to issue its statement March 22. Imagination is based in the United Kingdom.

"From time to time, Apple talks with companies about potential acquisitions," company officials said in the brief statement. "We had some discussions with Imagination, but we do not plan to make an offer for the company at this time."

Apple builds its own CPU cores and uses Imagination's GPU in many of its chips. Imagination is heavily dependent on Apple's iPhone and iPad businesses, and has been hurt in recent months by the slowing sales of the smartphone. The company has had disappointing financial results in recent quarters and has seen its stock price slip, prompting officials in February to announce a significant restructuring.

The restructuring included the resignation of Hossein Yassaie after 18 years as the company's CEO, and at the time, officials also announced plans to lay off 150 employees. Earlier this month, Imagination officials said they wanted to accelerate their plans, including cutting another 200 jobs. The chip maker also will sell or shut down non-core units as part of the larger effort to save almost $40 million in expenses by the end of its next fiscal year, which runs through April 2017.

Officials also said the company will focus on three core businesses: PowerVR GPUs, MIPS for compute processing and Ensigma for connectivity. Imagination will not reduce investment or headcount in any of those areas, they said.

Over that past several years, Imagination tried to reduce its reliance on the Apple products by expanding into growth areas like wearable devices and data center systems. In 2012, the company paid $100 million for the MIPS processor technology.