San Francisco [US], August 23: Intel Corporation on Friday announced an agreement with the Trump Administration under which the U.S. government will make an 8.9 billion U.S. dollar investment in Intel common stock.
The government agrees to purchase 433.3 million primary shares of Intel common stock at a price of 20.47 dollars per share, equivalent to a 9.9 percent stake in the company.
The government's equity stake will be funded by the remaining 5.7 billion dollars in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act, and 3.2 billion dollars awarded to the company as part of the Secure Enclave program.
The 8.9 billion dollar investment is in addition to the 2.2 billion dollars 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 U.S., Intel is deeply committed to ensuring the world's most advanced technologies are American made," said Lip-Bu Tan, CEO of Intel, adding that Intel looks forward to working to "advance U.S. 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 20 dollars per share for an additional 5 percent of Intel common shares, exercisable only if Intel ceases to own at least 51 percent 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.
Source: Xinhua News Agency
