SAN FRANCISCO: Intel Corporation announced on Friday that it has reached an agreement with the Trump Administration under which the United States (US) government will invest US$8.9 billion in Intel’s common stock, reported Xinhua.
The government will acquire 433.3 million newly issued Intel common shares at US$20.47 each, representing a 9.9 per cent stake in the company.
The government’s equity stake will be funded by the remaining US$5.7 billion in previously awarded but unpaid grants to Intel under the US CHIPS and Science Act, and US$3.2 billion awarded to the company through the Secure Enclave programme.
The US$8.9 billion investment is in addition to the US$2.2 billion in CHIPS grants Intel has received to date, according to the company.
“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the US, Intel is deeply committed to ensuring the world’s most advanced technologies are American-made,” said Lip-Bu Tan, Chief Executive Officer of Intel, adding that Intel looks forward to working to “advance US technology and manufacturing leadership”.
The government’s investment will be a passive ownership, with no Board representation or other governance or information rights. The government also agrees to vote with the company’s board of directors on matters requiring shareholder approval, with limited exceptions, according to Intel.
The government will receive a five-year warrant, at US$20 per share for an additional 5 per cent of Intel common shares, exercisable only if Intel ceases to own at least 51 per cent of the foundry business.
“The US taking partial ownership would mark a stunning level of intervention in an American company, shattering norms that investors and policymakers have long considered sacrosanct except in the most extraordinary situations such as war or a systemic economic crisis,” Bloomberg reported. – BERNAMA-XINHUA
