Intel's financial restructuring efforts continue as the tech giant makes a significant move to streamline operations and strengthen its balance sheet. The company has entered into an agreement with private investment firm Silver Lake that will reshape the future of its programmable logic device business.
The Deal Structure
Intel has agreed to sell a 51% controlling stake in its Altera division to Silver Lake for US$4.46 billion, while retaining the remaining 49% ownership. This transaction values Altera at approximately US$8.75 billion, a significant decrease from the US$16.7 billion Intel paid to acquire the company in 2015. The deal is expected to close in the second half of 2025, after which Altera's financial results will no longer be consolidated in Intel's statements. This arrangement allows Intel to maintain a substantial interest in Altera's future performance while immediately improving its financial position.
Deal Valuation
- Sale price: US$4.46 billion for 51% stake
- Current Altera valuation: US$8.75 billion
- Original acquisition price (2015): US$16.7 billion
- Value decrease since acquisition: Approximately 47.6%
Strategic Refocus for Intel
The divestiture represents a strategic pivot for Intel under new CEO Lip-Bu Tan, who has been tasked with revitalizing the company after it lost ground to competitors like NVIDIA and AMD. Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet, Tan stated. By partially divesting Altera, Intel can concentrate resources on its core business areas including CPUs, GPUs, supporting platforms, and chip production technologies. This move aligns with Tan's broader strategy to streamline operations and address financial challenges that have plagued the company in recent years.
Altera's Performance Challenges
The decision to sell comes after Altera has struggled to deliver the expected returns on Intel's investment. In 2024, Altera reported an operating loss of US$615 million, with its revenue accounting for only 3% of Intel's total sales. Intel's original plan to shift Altera's chip production in-house proved costly and failed to generate the anticipated synergies. The significant gap between Altera's current valuation and its acquisition price highlights the challenges Intel faced in successfully integrating and growing the FPGA business over the past decade.
Altera Financial Performance (2024)
- Operating loss: US$615 million
- Revenue contribution to Intel: 3% of total sales
Silver Lake's Growing Tech Portfolio
For Silver Lake, this acquisition represents another major investment in the technology sector. The private investment firm already manages over US$104 billion in investments across a portfolio of companies that collectively generate US$252 billion in annual revenue. Silver Lake has previously made notable investments in companies like Twitter and Airbnb, each valued at US$1 billion. The addition of a controlling stake in Altera further diversifies its holdings in the semiconductor space and positions the firm to capitalize on growth in specialized chip markets.
Silver Lake Investment Portfolio
- Total managed investments: Over US$104 billion
- Portfolio companies' annual revenue: US$252 billion
Altera's Future Direction
Under the new ownership structure, Altera will operate as an independent entity while maintaining its focus on field-programmable gate arrays (FPGAs) and bespoke semiconductor solutions. The company aims to strengthen its position in established markets such as automotive, aerospace, and communications, while pursuing growth opportunities in emerging sectors including artificial intelligence, cloud platforms, edge systems, and next-generation wireless networks. This independence may provide Altera with greater operational flexibility while still benefiting from Intel's technological expertise through the remaining ownership stake.
Leadership Transition
The ownership change follows a recent leadership transition at Altera. Just one week before the deal was announced, Intel appointed Raghib Hussain, former president of Products and Technologies at Marvell, as the new chief executive officer of Altera, replacing Sandra Rivera. This leadership change, combined with the new ownership structure, positions Altera to become the largest technically independent company in its specialized market segment, though questions remain about how much influence Intel will continue to exert through its substantial minority stake.