Apollo Global reportedly investing $5 billion in Intel
According to insiders, Apollo Global Management has offered to invest billions of dollars in Intel, a move that would be a vote of confidence in the chipmaker’s turnaround strategy.
The alternative asset manager has in recent days indicated that it is willing to make an equity-like investment of as much as $5 billion (about Rs. 41,753 crore) in Intel, said one of the people, who requested anonymity to discuss confidential information. Intel executives have been considering Apollo’s proposal, the people said.
Nothing has been finalised yet, the size of the potential investment could still change and negotiations could fail, resulting in no deal, the sources said.
The development comes as San Diego-based Qualcomm is pursuing a friendly takeover of Intel, insiders said Saturday, raising the prospect of one of the largest mergers and acquisitions ever.
Representatives for Apollo and Intel declined to comment.
Under the leadership of CEO Pat Gelsinger, Intel has been working on an expensive plan to reinvent itself and introduce new products, technologies and external customers.
That move has led to a series of deteriorating earnings reports that have undermined confidence in the venture and wiped tens of billions of dollars from its market value. While Apollo may be best known today for its underwriting, buyout and lending strategies, the firm began in the 1990s as a specialist in distressed investments.
The companies already have a relationship. Santa Clara, California-based Intel in June agreed to sell a stake in a joint venture that operates a factory in Ireland to Apollo for $11 billion (roughly Rs. 91,857 crore), raising more outside funding for a massive expansion of its factory network.
Apollo also has other experience in the chipmaking sector. Last year, the New York-based company agreed to lead a $900 million (roughly Rs. 7,515 crore) investment in Western Digital Corp., buying convertible preferred shares.
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