Intel to Sell 51% Altera Stake to Silver Lake Amid Cost Cuts

Intel Corp. has agreed to sell a 51% stake in its programmable chips unit Altera to Silver Lake Management, making good on plans to start spinning off non-core assets.

The transaction values Altera at $8.75 billion, according to a statement on Monday, about half what Intel paid for it a decade ago. Intel will continue to hold a 49% stake in the business. The deal is expected to close in the second half of 2025. Bloomberg reported previously on the talks between the two companies.

Intel will receive about $3.4 billion in cash from Silver Lake as part of the deal, according to people familiar with the matter, who asked not to be identified because the matter is private.

Altera will be run by Raghib Hussain, replacing Sandra Rivera as chief executive officer. Hussain will join from Marvell Technology Inc., where he’s president of products and technologies.

“Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet,” said Intel CEO Lip-Bu Tan.

Silver Lake has a track record in investing in semiconductors companies. It was an early backer of Broadcom Inc’s acquisition strategy.

“This investment represents a once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors,” said Kenneth Hao, chairman and managing partner of Silver Lake, who added that under new leadership Altera will be focused on investing in “emerging AI-driven markets such as edge computing and robotics.”

Shares of Intel rose as much as 6.6% after markets opened in New York.

Intel agreed in 2015 to pay $16.7 billion for Altera, whose multiuse chips are primarily deployed in telecommunications networks. In 2024, the US chipmaker said it would look to sell a stake in Altera — part of a broader plan to turn its business around. Altera drew interest from Lattice Semiconductor Corp. and a group of buyout firms, Bloomberg News has reported.

Intel has lost market share to rivals in recent years and missed the shift to artificial intelligence accelerators, a market now dominated by Nvidia Corp. Intel’s board ousted CEO Pat Gelsinger last year after his comeback plan was slow to gain momentum.

Tan, who recently stepped into the role of CEO, said about two weeks ago that the chipmaker will spin off assets that aren’t central to its mission, and create new products including custom semiconductors to try to better align itself with customers.

Intel needs to replace the engineering talent it’s lost, improve its balance sheet and better attune manufacturing processes to meet the needs of potential customers, Tan told attendees at a company conference. He didn’t specify which parts of Intel were no longer key to its future.

A transaction for Altera comes at a time when deal activity has been crippled globally due to repercussions from US President Donald Trump’s trade tariffs. Still, private equity firms sitting on more than $700 billion in dry powder are hunting for targets that are more resilient to a trade war than manufacturers.

--------

Get more on The Bloomberg Intelligence Podcast

Follow us on X

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals