U.S. Government to make $8.9B investment in Intel common stock

Intel (INTC) announced an agreement with the Trump Administration to support the continued expansion of American technology and manufacturing leadership. Under terms of the agreement, the United States government will make an $8.9B investment in Intel common stock, reflecting the confidence the Administration has in Intel to advance key national priorities and the critically important role the company plays in expanding the domestic semiconductor industry. The government’s equity stake will be funded by the remaining $5.7B in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2B awarded to the company as part of the Secure Enclave program. Intel will continue to deliver on its Secure Enclave obligations and reaffirmed its commitment to delivering trusted and secure semiconductors to the U.S. Department of Defense. The $8.9B investment is in addition to the $2.2B in CHIPS grants Intel has received to date, making for a total investment of $11.1B. Under the terms of today’s announcement, the government agrees to purchase 433.3M primary shares of Intel common stock at a price of $20.47 per share, equivalent to a 9.9% stake in the company. This investment provides American taxpayers with a discount to the current market price while enabling the U.S. and existing shareholders to benefit from Intel’s long-term business success. The government’s investment in Intel 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. The government will receive a five-year warrant, at $20 per share for an additional five percent of Intel common shares, exercisable only if Intel ceases to own at least 51% of the foundry business. The existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2B grant to Intel under the CHIPS Act will be eliminated to create permanency of capital as the company advances its U.S. investment plans.