Intel Close to $11B Ireland Partnership Deal with Apollo

Intel Corporation (NASDAQ:NTC) is nearing a significant agreement with Apollo Global Management (NYSE:APO) to invest over $11 billion in a new chip manufacturing plant in Ireland. The two companies are currently in exclusive discussions about the partnership, which could be finalized in the upcoming weeks unless unforeseen obstacles arise.

Previously, other alternative investment firms including KKR & Co. Inc. (NYSE:KKR) and Stonepeak had shown interest in this project, but Apollo has recently taken the lead. This deal is being led by Apollo’s High-Grade Capital Solution business, which typically provides financing to large, investment-grade companies.

This strategic move is part of Intel’s global expansion under CEO Pat Gelsinger, who has been aggressively building and expanding manufacturing facilities in Ireland, Arizona, Ohio, and other locations. These expansions are designed to meet the increasing global demand for semiconductors and to support Intel’s relatively new contract chip-making business that competes with leaders like Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) and Samsung Electronics.

Financing these costly ventures is crucial for Intel, especially as the company faces financial strain from a slowdown in its core business of PC and server chips, leading to a decrease in its share price and delayed projects like the Ohio facility. Two years prior, Intel had arranged a similar $30 billion funding agreement with Brookfield Asset Management for constructing facilities in Arizona.

Besides seeking investor funding, Intel is also anticipated to receive substantial government support through the Chips Act for its projects in the U.S. Moreover, Intel has had a long-standing presence in Ireland, with significant operations including a semiconductor-wafer fabrication facility in County Kildare and a research-and-development campus.

New York-based Apollo, managing approximately $671 billion in assets, and other alternative investment managers have shown increased interest in infrastructure investments, particularly in partnerships with multinational corporations. This trend is evident with recent deals like the T-Mobile joint venture with EQT to expand broadband services. Goldman Sachs is acting as the advisor to Intel on this transaction.

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