Historic 10% Stake in Intel Acquired by US Government for $8.9 Billion
The Trump administration announced on Friday that the US government has made a historic acquisition of a 10% stake in Intel Corporation. This unprecedented move of federal control over a major technology company comes through an $8.9 billion investment.
The government’s purchase consisted of 433.3 million shares at $20.47 per share. The funding for this acquisition was sourced by converting $5.7 billion in previously awarded CHIPS Act grants and $3.2 billion from the Defense Department’s Secure Enclave program into equity. Along with the $2.2 billion already received, the total government investment amounts to $11.1 billion.
The deal was negotiated directly between President Trump and Intel CEO Lip-Bu Tan. The president hailed it as “a great deal for America.” However, Intel has warned in its SEC filings about potential “adverse reactions” from investors and concerns over international sales, which make up 76% of the company’s revenue.
Despite the government’s significant investment, the agreement does not include board representation. The government will vote alongside Intel’s current board on shareholder matters. National Economic Council Director Kevin Hassett has suggested that this could be “like a down payment on a sovereign wealth fund,” hinting that the administration may consider similar stakes in other companies in the future.
Source: CNBC