U.S. Government, Intel Strike USD8.9B Investment Deal
(MENAFN) Intel Corporation revealed a significant agreement on Friday with the Trump Administration, under which the U.S. government will invest $8.9 billion in the tech giant. This deal includes the purchase of 433.3 million shares of Intel common stock at $20.47 per share, granting the government a 9.9% stake in the company.
This investment will be financed through a combination of unused funds from the CHIPS and Science Act—5.7 billion dollars in grants that were previously allocated to Intel, along with an additional $3.2 billion awarded under the Secure Enclave program. According to the company, this $8.9 billion infusion is separate from the $2.2 billion in CHIPS grants Intel has already received.
Lip-Bu Tan, CEO of Intel, emphasized the company's role as a leader in semiconductor manufacturing and R&D, stating, "As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world's most advanced technologies are American made." He added that Intel looks forward to helping "advance U.S. technology and manufacturing leadership."
The government's stake in Intel will remain passive, with no representation on the company’s board or other governance privileges. The U.S. will, however, vote with the board on shareholder issues, with some exceptions. Additionally, the government will receive a five-year warrant to purchase an additional 5% of Intel's shares at $20 per share, but only if Intel ever owns less than 51% of its foundry business.
The agreement marks a rare and significant move by the U.S. government. According to a media report, "The US taking partial ownership would mark a stunning level of intervention in an American company, shattering norms that investors and policymakers have long considered sacrosanct except in the most extraordinary situations such as war or a systemic economic crisis."
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