Intel sells majority stake in Altera for $4.46 billion, what makes the deal that Intel paid double for in 2025 important

TOI Tech Desk / TIMESOFINDIA.COM / Updated: Apr 15, 2025, 11:11 IST

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Intel, under new CEO Lip-Bu Tan, is selling a 51% stake in its Altera programmable chip business to Silver Lake for $4.46 billion. This deal values Altera at $8.75 billion, significantly less than Intel's 2015 acquisition price. The move aims to provide Intel with capital to strengthen its finances and streamline operations, following unsuccessful diversification attempts.

Intel sells majority stake in Altera for $4.46 billion, what makes the deal that Intel paid double for in 2025 important

Intel has agreed to sell a 51% stake in its Altera programmable chip business to private equity firm Silver Lake for $4.46 billion, marking the first significant move by new CEO Lip-Bu Tan to revitalize the struggling chipmaker.
The deal, announced Monday, values Altera at $8.75 billion—nearly half the $17 billion Intel paid when acquiring the company in 2015. Despite the significant write-down, the transaction provides Intel with crucial cash as it works to strengthen its financial position following costly manufacturing investments made under former CEO Pat Gelsinger.
Asset divestiture forms a central component of Tan's strategy to streamline Intel's operations after years of unsuccessful diversification attempts beyond its core PC and server chip business. These missteps have left Intel struggling to compete in the AI market dominated by Nvidia, while simultaneously facing increased pressure from AMD in its traditional central processor stronghold.
"Today's announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," said Tan, who replaced Gelsinger in December following his ouster.

The transaction is expected to close in the second half of 2025, after which Intel will deconsolidate Altera's financial results. Raghib Hussain, previously an executive at custom AI chipmaker Marvell, will take over as Altera's CEO beginning May 5.
Altera generated $1.54 billion in revenue in 2024—representing just 3% of Intel's total sales—while posting an operating loss of $615 million. Intel's attempt to shift Altera's production in-house from TSMC proved costly and resulted in market share losses to rival Xilinx, now owned by AMD.
Industry analysts expect further asset sales as Intel continues to refocus on its core businesses, with the company's majority stake in self-driving technology firm Mobileye Global considered another potential divestiture candidate.

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