Intel CEO Pat Gelsinger testifies during the Senate Commerce, Science, and Transportation Hearing on Semiconductors, “Developing Next Generation Innovative Technologies,” in the Russell Senate Office Building on Wednesday, March 23, 2022.
Tom Williams | Chongqing Roll Call Company | Getty Images
Intel Altera is seeking to sell at least a minority stake in its Altera subsidiary, which would raise billions of dollars in cash for the troubled company, according to people familiar with the matter. The move would be a sharp shift from previous approaches. public messaging On the prospects for big companies.
The storied semiconductor company has made offers to a number of private equity and strategic investors this week, people familiar with the matter said. A person familiar with the matter said Intel has expressed to some of these investors the possibility of acquiring a majority stake in the Altera business, which was valued at $16.7 billion when Intel acquired it in 2015.
Intel is seeking a deal that would value Altera at about $17 billion, people familiar with the matter said.
An Intel representative declined to comment. The sale process is in stark contrast to Intel’s previous comments about Altera, with the company’s chief executive saying as recently as September that Intel leadership views the business as a core part of Intel’s future.
Intel has previously said it may seek to monetize its Altera business through an initial public offering, possibly as early as 2026. But the idea of ​​taking a strategic or private equity investment will significantly accelerate the implementation of these plans.
Chief Executive Pat Gelsinger and his leadership team have previously said Intel understands its disadvantaged position and is actively working to compensate. To be sure, selling a minority stake in Altera would make it easier for Intel to pursue its semiconductor manufacturing ambitions and give investors confidence that Intel has a strong path forward as an independent company.
But the sale comes as Qualcomm expresses interest in acquiring its one-time rival, a deal that would face intense regulatory scrutiny and reshape the semiconductor industry. Intel must deal with a huge debt load, and its stock price has plunged more than 50% so far this year.
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