Apollo Seeks to Save Intel with Huge Investment
Intel has received an offer from US asset management firm Apollo Global Management to invest $5 billion in it, Bloomberg reported , citing informed sources.
This comes after recent press reports that rival Qualcomm has made an offer to acquire Intel .
The people familiar with the talks confirmed that Apollo recently expressed interest in investing in Intel through an “equity-like investment,” a financial investment that has characteristics similar to an equity investment but may not be a direct investment in the company’s common stock. This type of investment gives its holders some of the privileges associated with ownership of the company or participation in its profits, along with some additional guarantees or benefits, such as priority in dividend distributions or capital protection.
The sources indicated that Intel's management is currently studying these offers, which are still in their initial stages, with the possibility of the investment size changing as the discussions develop.
If Apollo's investment goes ahead, it wouldn't be the first time Apollo has put money into Intel; earlier this year, Apollo announced it was taking a 49% stake in a joint venture involving a new manufacturing facility Intel is building in Ireland, for an $11 billion investment.
An Apollo investment could be a more realistic solution to Intel's challenges than a potential acquisition by Qualcomm, especially given the increasing scrutiny from regulators on mergers and acquisitions by big tech companies.
Qualcomm's bid would likely face regulatory hurdles given its impact on competition, while Apollo is not a chipmaker, so its investment in Intel would not raise competition concerns.
Intel has seen its performance decline significantly over the past year, losing a significant portion of its stock value and losing competition in the AI chip market to Nvidia. The company has announced plans to lay off about 15% of its total workforce to save costs, suspend plans to build two factories, and spin off its chip manufacturing business into an independent company.