Intel buys back Apollo's stake in Ireland factory, shares surge

(Sharecast News) - Intel shares surged on Wednesday after the chip maker agreed to buy back the 49% stake in a joint venture related to its Irish plant, Fab 34, from Apollo Global Management, for $14.2bn. Intel said the agreement reflects its continued business momentum "underpinned by the growing and essential role CPUs play in the era of AI, a significantly strengthened balance sheet and the strong partnership between Intel and Apollo".

In 2024, Apollo led an $11.2bn investment to buy the 49% interest in a JV entity related to Fab 34, providing Intel with equity-like capital while preserving balance sheet strength.

"This transaction provided Intel with significant financial flexibility and enabled the company to unlock and redeploy capital to advance its strategic priorities including accelerating the buildout of Intel 4 and Intel 3, the most advanced processes manufactured in Europe, and of Intel 18A, the most advanced process developed and manufactured in the US today," Intel 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," said Intel chief financial officer David Zinsner.

He said the 2024 agreement was the right structure at the right time and provided the group with "meaningful flexibility", enabling it to accelerate critical initiatives.

"Today, we have a stronger balance sheet, improved financial discipline and an evolved business strategy," he said. "We appreciate Apollo's continued collaboration to reach this outcome as we realign our capital structure with our long-term strategy."

The deal is expected to be accretive to ongoing earnings per share while strengthening Intel's credit profile in 2027 and beyond.

Intel added that Ireland and Fab 34 remain central to its global manufacturing footprint and current and future product roadmap.

At 1625 BST, Intel shares were up 10.8% at $48.46.