Intel Corp. has agreed to sell a 51% stake in its programmable chips unit Altera to Silver Lake Management, valuing the business at $8.75 billion, roughly half of what Intel paid for it in 2015.
The transaction, expected to close in the second half of 2025, will see Intel retain a 49% stake in Altera and receive approximately $3.4 billion in cash from Silver Lake. Bloomberg had previously reported on the talks between the two companies. As part of the deal, Raghib Hussain will become the CEO of Altera, replacing Sandra Rivera. Hussain joins Altera from Marvell Technology Inc., where he served as president of products and technologies.
Intel CEO Lip-Bu Tan stated that the sale reflects the company’s commitment to sharpening its focus, lowering its expense structure, and strengthening its balance sheet. “Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet,” Tan said.
Silver Lake, known for its investments in semiconductor companies, views this as a significant opportunity. Kenneth Hao, chairman and managing partner of Silver Lake, noted that the investment represents a “once-in-a-generation opportunity to invest in a scale leader in advanced semiconductors.” Hao added that under new leadership, Altera will focus on emerging AI-driven markets such as edge computing and robotics.
Altera’s multiuse chips are primarily deployed in telecommunications networks. Intel initially acquired Altera in 2015 for $16.7 billion. The decision to sell a stake in Altera is part of Intel’s broader plan to turn its business around after losing market share to rivals and missing the shift to artificial intelligence accelerators, a market now dominated by Nvidia Corp.
Intel has been working on a turnaround plan, which includes spinning off non-core assets and developing new products such as custom semiconductors to better align with customer needs. Tan recently mentioned that the company will spin off assets that aren’t central to its mission. The sale of a stake in Altera occurs amidst a challenging global dealmaking environment due to trade tensions. However, private equity firms like Silver Lake are seeking resilient targets, with over $700 billion in dry powder available for investments.
Shares of Intel rose as much as 6.6% after markets opened in New York following the announcement. The transaction is seen as a strategic move by Intel to improve its balance sheet and refocus its business, while Silver Lake sees potential in Altera’s capabilities in AI-driven markets.
