Apollo Global Management has proposed a multibillion-dollar investment in Intel, Bloomberg reports.
Recently, Apollo expressed its readiness to invest up to $5 billion in Intel in the form of shares, according to one of the insiders, who wished to remain anonymous due to the confidential nature of the negotiations. Intel's management is currently considering Apollo's offer, although no final decision has been made. The amount of investment is subject to change, and it is possible that the negotiations could end without a deal.
This development coincides with reports that Qualcomm is considering a friendly takeover of Intel, potentially leading to one of the largest M&A deals in history.
Intel, led by CEO Pat Gelsinger, is implementing an ambitious and expensive strategy to reinvent the company, focusing on new products, technologies, and external customer acquisition. However, this initiative has resulted in several disappointing earnings reports, a decline in investor confidence, and the loss of tens of billions of dollars from the company's market valuation. Apollo Global Management, known for its insurance, buyout and lending strategies, has been investing in distressed companies since its early years in the 1990s.
Intel and Apollo already have a business relationship. In June, Intel agreed to sell Apollo a $11 billion stake in a joint venture that operates a fab in Ireland in order to raise additional external funding to significantly expand its fab network.
Apollo also has previous experience in the semiconductor industry. Last year, it made a $900 million investment in Western Digital through the purchase of convertible preferred stock. Representatives of both Apollo and Intel declined to comment on discussions of potential investments.