New Leadership Opens Door to Potential Deals for Intel
The sudden departure of Intel CEO Pat Gelsinger presents a fresh opportunity for the company to reassess its strategy and consider potential deal options. Despite Gelsinger’s opposition to breaking up the company, the board has explored various scenarios, including private equity transactions and splitting Intel’s factory and product-design businesses.
Resetting the Conversation
With Gelsinger’s exit, the company can now revisit these options with a more open mind. Morgan Stanley and Goldman Sachs Group Inc. have been advising Intel on its possibilities, and may find a more receptive audience under new management. This could also be an opportunity for suitors to re-examine acquiring parts or all of the business.
Potential Deal Ideas
Several deal ideas could be revisited under new leadership:
Splitting Factory and Product Divisions
Intel could fully separate its factory business from its product division, allowing the company to focus on its core competencies. However, finding a suitor for the factory operation could be challenging, and the move would complicate Intel’s ability to secure federal grants under the US Chips and Science Act.
Luring a Suitor like Qualcomm
Qualcomm Inc. previously expressed interest in acquiring parts of Intel, but its interest cooled due to the complexities involved. However, with Gelsinger’s departure, Qualcomm could reconsider buying pieces of Intel, such as the product business.
Selling Altera
Intel’s Altera unit, acquired in 2015, makes reprogrammable chips. The company has held talks about selling a portion of the business to financial investors, potentially paving the way for an initial public offering. Buyout firms like Francisco Partners, Bain Capital, and Silver Lake Management have been studying offers to invest in Altera.
An Apollo Investment
Apollo offered to make a multibillion-dollar investment in Intel earlier this year, but negotiations didn’t lead to an announcement. With Gelsinger’s exit, Apollo may revisit its offer, given its existing relationship with Intel.
A Mobileye Transaction
Intel acquired Mobileye, a self-driving technology maker, in 2017. Although Mobileye went public in 2022, Intel still owns most of the company. Under new leadership, Intel could reassess its options for its majority stake in Mobileye, potentially offloading some or all of its holding.
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