Intel Sells Majority Stake in Altera Semiconductor Business to Silver Lake
On Monday, Intel Corporation, the world’s largest chipmaker, announced that it has reached a definitive agreement to sell a 51% stake of its Altera semiconductor business to Silver Lake, a leading technology-focused global private equity firm. This transaction is expected to close in the second half of 2023, subject to customary closing conditions and regulatory approvals.
Background on Intel and Altera
Intel, based in Santa Clara, California, is a global leader in innovation and technology. It is best known for its microprocessors, which are the brains of most personal computers. Intel’s Altera business, based in San Jose, California, is a leading provider of programmable logic devices and custom logic solutions. These semiconductors are used in various applications, including telecommunications, military, and industrial automation.
Why the Sale?
Intel’s decision to sell a majority stake in Altera comes as the chipmaker is focusing on its core business, which is manufacturing and selling microprocessors and other semiconductors. Intel’s CEO Pat Gelsinger, who joined the company in February 2021, has been leading a strategic review of Intel’s business and exploring opportunities to streamline operations and improve profitability. By selling Altera to Silver Lake, Intel can focus on its core business and unlock value for its shareholders.
Impact on Intel
The sale of Altera is expected to bring Intel approximately $1.5 billion in net cash and is expected to be neutral to Intel’s non-GAAP earnings in the first year. Intel will continue to manufacture and sell Altera products, and the two companies will collaborate on certain technology development projects. Intel will also retain a significant equity stake in Altera and will have certain governance rights.
Impact on the World
The sale of Altera to Silver Lake is significant for the semiconductor industry and the technology sector as a whole. It shows that private equity firms are increasingly interested in investing in technology companies, especially those with strong intellectual property and a proven track record of innovation. It also demonstrates that Intel, despite its size and dominance in the microprocessor market, is not immune to the trends of consolidation and strategic realignment in the tech industry.
Future of Altera
Under Silver Lake’s ownership, Altera is expected to continue to innovate and grow. Silver Lake has a track record of investing in technology companies and helping them achieve their growth potential. Altera’s customers and partners can expect continued support and collaboration from Intel, and Altera is likely to explore new opportunities and markets, especially in the areas of automotive, industrial, and telecommunications.
Conclusion
Intel’s decision to sell a majority stake in its Altera semiconductor business to Silver Lake is a strategic move that will help Intel focus on its core business and unlock value for its shareholders. It is also a sign of the ongoing consolidation and strategic realignment in the technology industry. Under Silver Lake’s ownership, Altera is expected to continue to innovate and grow, and its customers and partners can expect continued support and collaboration from Intel.
- Intel sells 51% of Altera semiconductor business to Silver Lake
- Transaction expected to close in H2 2023, subject to customary closing conditions and regulatory approvals
- Intel to focus on core business, unlock value for shareholders
- Altera to continue to innovate and grow under Silver Lake’s ownership
- Impact on Intel: Neutral to non-GAAP earnings in first year, approx. $1.5 billion in net cash
- Impact on the World: Increasing interest of private equity firms in tech companies, consolidation and strategic realignment in tech industry
