By Arsheya Bajwa
(Reuters) -Intel has agreed to sell an interest of 51% in its altera -programmable chip company to buy -out company Silver Lake for $ 4.46 billion, in the first major step of the new CEO LIP -BU Tan to breathe new life into the wrestling American chip maker.
The deal values of Monday Altera on just $ 8.75 billion compared to the nearly $ 17 billion Intel paid in 2015, but the sale will offer the company much -needed cash after hefty bets on contract production by former CEO Pat Gelsinger tensions his finances.
The shedding of assets, including the importance of Intel in Altera, is central to TAN’s strategy to streamline the chip maker after predecessors were not diversified outside the pillar and server chip activities for years.
The manager of missteps have difficulty getting a foot in the AI industry that is dominated by Nvidia, while rival AMD threatens its stronghold of the central procession market.
“Today’s announcement reflects our dedication to sharpen our focus, lower our cost structure and strengthen our balance,” said Tan, who took over the helm to the expulsion of Gelsinger in December.
Intel shares rose by 2.8% in the afternoon trade.
Since last year, Intel has taken steps to spin Altera, which makes programmable chips that can be used for different purposes in industries ranging from telecom to the army.
The deal is expected to close in the second half of 2025, after which Intel expects the financial results of Altera to deconsolidation.
Raghib Hussain, a former director of the adapted AI chip maker Marvell, will follow Sandra Rivera as Altera CEO from 5 May.
Core Business Focus
Altera achieved $ 1.54 billion sales in 2024, only 3% of the total turnover of Intel and an operational loss of $ 615 million.
After he had taken over the company, Intel was planning to relocate Altera’s chip production in -house of Taiwan’s TSMC, who started to draw.
But the long and expensive transition has eroded the market share of Altera, allowing rival Xilinx, which was later purchased by AMD, to be purchased.
“The rejection of Altera is on a market down-cycle and at the bottom of the sales performance of Altera. It is not the best time to sell the importance of Altera,” says Hendi Susanto, a portfolio manager at Gabelli Funds with Intel shares.
“Some investors may see the transaction more positive in terms of Intel that strengthen the focus on its core companies.”
Reuters had reported Silver Lake for the first time in November was one of the potential lovers who compete for an interest in Altera.
Bob O’Donnell, chief analyst at Technalysis Research, said he expected that Intel will dispose of more assets.
