Intel just announced a "definitive agreement" to sell 51% of its stake in US-based Altera, an FPGA (programmable) semiconductor manufacturer, to Silver Lake, a global investment company, for $4.46 billion (via Intel).
With this deal-in-motion, Altera is now valued at $8.75 billion, and Intel will still retain a 49% stake if everything goes through as planned in the second half of this year, allowing Intel to "participate in Altera’s future success" while allowing it more operating independence.
The announcement comes soon after the recent appointment of Intel's new CEO, Lip-Bu Tan, who says it "reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet".
We look forward to partnering with Silver Lake upon closing of the transaction, as their industry expertise will help to accelerate Altera's efforts and unlock additional economic value for Intel.
Lip-Bu Tan, Intel CEO
Kenneth Hao, chairman and managing partner of Silver Lake, calls it a "once-in-a-generation opportunity," and it undoubtedly shows further progress in expanding self-sufficient semiconductor manufacturing foundries in the United States.
Besides the obvious benefits of a multi-billion-dollar cash injection, the agreement falls in line with Tan's game plan to rebuild Intel as a "world-class" foundry. Intel plans to remove Altera’s financial results from its consolidated financial statements when the deal is complete, which should at least point its numbers and graphs in a positive direction.
In the financial world, almost all eyes are on President Trump's ever-changing reciprocal tariffs, but this "definitive agreement" at least hints at a move in the right direction for Intel and its desires to thrive within the US — if everything goes off without a hitch in the second half of 2025, it should be beneficial for Altera, Silver Lake, and Intel alike.
Where the money might be reinvested within Intel is anyone's guess, but it'll be interesting to see what happens later this year.
