Intel has agreed to buy back the 49% equity interest in the Fab 34 joint venture (JV) in Ireland that is held by Apollo-managed funds and affiliates, in a transaction valued at $14.2bn.
The deal will return full ownership to Intel of the high-volume semiconductor fabrication facility and is structured as a repurchase of the JV stake established earlier this year.
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Intel plans to fund the repurchase with a mix of existing cash and around $6.5bn in new debt issuance.
The company expects the transaction to increase its ongoing earnings per share and to improve its credit profile from 2027 onwards.
Furthermore, Intel continues to plan to retire its debt maturities as they come due in 2026 and 2027.
The agreement follows an $11.2bn investment in 2024 by Apollo-managed funds and affiliates, which acquired the same 49% equity interest in the Fab 34-related JV.
That earlier transaction provided Intel with equity-like capital while maintaining its balance sheet metrics and allowed the company to free up capital for other uses.
Intel used the earlier JV structure to support its manufacturing roadmap, including the buildout of its Intel 4 and Intel 3 process technologies in Europe and Intel 18A in the US.
The company states that growing demand for central processing units in AI-related workloads, a strengthened balance sheet and its ongoing relationship with Apollo frame the context for the buyback agreement.
Fab 34 forms part of Intel’s wider manufacturing network and product roadmap. The facility produces processors based on Intel 4 and Intel 3 process technologies, including Intel Core Ultra and Intel Xeon 6 products, and is designed for high-volume output.
Intel continues to invest capital in its Ireland campus to expand capacity and support customers developing AI-enabled systems.
Intel CFO David Zinsner said: “We thank Apollo for their ongoing partnership on our journey to build a world-class wafer fabrication and advanced packaging foundry anchored in trust, consistency, and execution.”
Goldman Sachs & Co. acted as Intel’s financial adviser on the transaction. Skadden, Arps, Slate, Meagher & Flom served as legal counsel, while Eversheds Sutherland and PricewaterhouseCoopers acted as tax and accounting advisers.
Paul, Weiss, Rifkind, Wharton & Garrison served as legal counsel to Apollo affiliates. Morgan Stanley & Co. acted as financial adviser and Kirkland & Ellis served as legal counsel to the seller’s independent board.
