MGX joins Silver Lake in buyout of Intel’s Altera chip business

Abu Dhabi-owned MGX agreed to co-invest with private equity firm Silver Lake and a group of partners in acquiring 51% of Intel’s programmable chip business, Altera.

The deal, which was announced on Tuesday after being completed on Sept. 12, values Altera at about $8.75 billion. The investor group led by Silver Lake paid approximately $3.3 billion for its majority stake.

The size of MGX’s individual investment was not immediately disclosed. Under the agreement, Intel will retain a 49% ownership in Altera (not to be confused with the UAE climate investment fund, Altérra).

MGX, founded last year by Abu Dhabi’s Mubadala sovereign wealth fund and tech company G42, said the deal aligns with its strategy to invest in the world’s most promising AI developers.

“Altera provides a foundational platform for next-generation computing,” Omar Alismail, MGX Chief Investment Officer, Semiconductors and Infrastructure, said in a statement. “This is an opportunity to scale a company of such significance into a true global leader for the AI era.”

The deal is one of the first in the semiconductor sector for MGX, which has set a goal to build its assets under management to at least $100 billion.

Intel preparing to sell off $1.5 billion stake in Israel’s Mobileye

Since Mobileye Global, the Israeli developer of self-driving car technology, sold shares last year in an IPO, its stock price has doubled. Now Intel Corp. is planning a secondary offering to carve some profit from the pioneering automotive startup it bought six years ago for more than $15 billion.

Intel, one of the largest computer chipmakers, will sell 35 million shares in its Jerusalem-based subsidiary, a stake worth about $1.5 billion, with an option to sell another 5.25 million shares, Mobileye said in a June 5 filing with the U.S. Security and Exchange Commission. Goldman Sachs and Morgan Stanley are managing the sale, which will leave Intel solidly in control with more than 88% of the shares.

Mobileye is a world leader in creating software, semiconductor chips, cameras and sensory arrays to enable the development of self-driving vehicles. BMW, Volkswagen and Nissan are among its clients. Senior auto executives regularly make the pilgrimage to Jerusalem to meet with Mobileye CEO Amnon Shashua.

The company raised some $860 million in its IPO at the end of October, giving it a market value of about $21 billion after the first day of trading. That was well short of the $50 billion Intel had earlier expected as it was making preparations for the initial offering. Since then the stock price has nearly doubled from $21 a share to $41.77 at the end of last week as its market cap surged to $34 billion. The sale will give Intel cash at a time that it has announced plans to invest in artificial intelligence, vying with upstart competitors such as Nvidia.

Mobileye shares are likely to reach $50 a share over the 12 months, according to Canaccord Genuity, a Toronto-based investment bank, which initiated coverage of the company last week with a “buy” rating. In an analyst note, Canaccord described autonomous driving as  “one of the highest value-creating technologies to be deployed. Ever.”

Noting Mobileye’s “impressive growth indicators and long-term potential within its category,” the investment bank said the company has a “dominant” 70% share in the advanced driver assistance systems (ADAS) market, adding that “its advantageous position in the emerging full self-driving market further strengthens its prospects.”