(Bloomberg) — Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel Corp., according to people familiar with the matter, in a move that would be a vote of confidence in the chipmaker’s turnaround strategy.
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The alternative asset manager has indicated in recent days that it would be willing to invest up to $5 billion in Intel, said one of the people, who spoke on condition of anonymity to provide confidential information. Intel executives have been reviewing Apollo’s proposal, the people said.
Nothing has been finalized, the size of the potential investment could change and the talks could break down, leading to no deal, the sources added.
The development comes as San Diego-based Qualcomm Inc. is considering a friendly takeover bid for Intel, people familiar with the matter said Saturday, raising the prospect of one of the largest merger and acquisition deals ever.
Representatives for Apollo and Intel declined to comment.
Under Intel CEO Pat Gelsinger, the company worked on a costly plan to overhaul its business, incorporating new products, new technologies and new customers. The effort led to a series of weak earnings reports that undermined confidence in the initiative and caused its stock price to plummet by tens of billions of dollars. While Apollo is best known today for its insurance, buyout and credit strategies, the company began in the 1990s as a specialist investor in distressed companies.
The two companies already have a relationship. Intel, headquartered in Santa Clara, California, agreed in June to sell Apollo a stake in a joint venture that controls a factory in Ireland for $11 billion, bringing in more outside funding for a massive expansion of its factory network.
Apollo also has other experience in chipmaking. Last year, the New York-based company agreed to lead a $900 million investment in Western Digital Corp., buying convertible preferred stock.
(Updated with additional information about Apollo in the last two paragraphs.)
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