[News] Intel Mulls Sale of Altera Stake, while Silver Lake and Bain Reported as Potential Buyers

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According to a report from TechNews, citing the Reuters, Silver Lake, Bain Capital and other potential acquirers are planning to acquire a minority stake in Altera, Intel’s programmable chips division.

Altera, a market leader in FPGAs, was acquired by Intel in 2015 for nearly USD 17 billion, with the initial goal of expanding Intel’s presence in the Internet of Things market. However, given Intel’s current financial pressures, Altera has become a business that can be spun off and sold.

Sources indicate that Intel hopes to sell Altera for a price similar to what it paid when acquiring the company in 2015. While it is unclear how much of Altera’s stake Intel plans to sell, any potential deal is expected to be valued at several billion dollars, according to the Reuters.

The Reuters report, citing industry sources, revealed that Intel has started the process of spinning off Altera as a separate company and has begun preliminary steps to sell Altera shares. Sources also noted that while negotiations are still in the early stages, Intel expects to receive initial bids from potential buyers in the coming weeks, according to the report.

In addition to Silver Lake and Bain Capital, the Reuters report mentioned that, citing industry sources, private equity firm Francisco Partners has also shown interest in acquiring a stake in Altera and is expected to be among the bidders.

According to the Reuters, for the quarter ending September 30, Intel announced that Altera’s revenue grew 14%, reaching USD 412 million. During the post-earnings conference call, Intel CEO Pat Gelsinger stated that the company is focused on selling a stake in Altera as part of its path toward an IPO in the coming years. He added that discussions with potential investors are underway, with a conclusion expected in early 2025.

The Reuters report noted that the transaction is expected to provide Intel with a much-needed cash injection. Despite announcing an optimistic revenue forecast in its latest quarterly report, Intel’s stock is down over 50% this year, as the company has missed the AI boom and is facing challenges to turn things around.

Notably, the Reuters report pointed out that before Intel acquired Altera, Altera had many of its chips manufactured by TSMC. Following the acquisition, Intel planned to shift Altera’s chip production to its own factories, while at that time, Intel was beginning to lose its manufacturing lead to TSMC.

According to the report from the Reuters, Intel’s transition of Altera’s production to its own factories proved to be lengthy and expensive. This move contributed to Altera losing market share to its main competitor, Xilinx, which was later acquired by AMD.

Read more

• [News] Intel Reportedly Aims to Raise Billions through Sale of Minority Stake in Altera
• [News] AMD Could Emerge as a Prospective Buyer for Intel’s Potential Sale of Altera

(Photo credit: Intel)