Intel in talks with Apollo over $5 billion investment as chipmaker faces critical crossroads
Massive cost cuts, layoffs, and acquisition interest from Qualcomm put Intel’s future in flux.
U.S.-based asset management company Apollo Global Management has offered to make an investment of as much as $5 billion in Intel, Bloomberg News reported on Sunday.
Apollo has indicated in recent days it would be willing to make an equity-like investment of billions of dollars in Intel, the report said, citing a person familiar with the matter.
The news comes at a moment of weakness for Intel, which was once the most valuable chipmaker in the world, but whose shares have lost nearly 60% of their value since the start of the year.
Intel executives have been weighing Apollo’s proposal, Bloomberg reported, adding that talks regarding the deal are in a preliminary stage and have not been finalized.
Bloomberg said that the size of the potential investment in Intel could change and discussions regarding a deal could also fall through.
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Intel declined to comment on the Bloomberg News report, while Apollo did not respond to a Reuters' request for comment.
Earlier this year, Apollo said it will acquire a 49% equity interest in a joint venture related to Intel's new manufacturing facility in Ireland for $11 billion.
The development for an investment in Intel comes soon after Qualcomm has in recent days approached Intel to explore a potential acquisition of the troubled chipmaker in what could be a transformational deal in the sector but faces many hurdles.
Qualcomm CEO Cristiano Amon is personally involved in the negotiations to acquire five-decade-old Intel, which are currently in an early stage, Reuters reported on Friday citing a source who was briefed on the matter.
Intel's current difficulties have led to a series of tough decisions in recent weeks. First, the company announced a massive cost-cutting plan, which includes reducing expenses by $10 billion and laying off 15,000 employees—about 15% of its workforce. Additionally, Intel has introduced a multi-faceted efficiency plan, which includes spinning off its foundry business into a subsidiary, halting plans to build factories in Europe and Asia, and reducing its global office footprint by two-thirds.
