The US government invested $8.9 billion in Intel (INTC.US) to become its largest single shareholder

The Zhitong Finance App learned that on Friday, Intel (INTC.US) announced that the US government will invest 8.9 billion US dollars in the company and become its largest single shareholder.

According to the announcement, the US government will purchase Intel shares at a price of 20.47 US dollars per share, with a shareholding ratio of 9.9%. This investment comes from $5.7 billion in “Chip and Science Act” grants that have not been paid before, as well as $3.2 billion in rewards from other US national security projects.

At the same time, Intel stressed that the US government's investment is a “passive investment,” and it will not join the company's board of directors, nor will it have the right to disclose information. In addition, the US government will also obtain a share warrant with an exercise price of $20 for a period of five years, which will allow Intel to hold less than 51% of its shares in the foundry business in the future under specific conditions.

US Secretary of Commerce Lutnick said on social media: “This historic agreement strengthens America's leading position in the semiconductor field and will not only promote economic growth, but also ensure America's technological superiority.”

Prior to that, according to FactSet data, Vanguard Group (Vanguard) was Intel's largest shareholder, holding 8.4% of the shares. Following this deal, the US government surpassed Pioneer Group to become Intel's largest single investor.

Earlier in the day, US President Trump said at the White House that Intel agreed to transfer 10% of its shares to the government. He called this “an excellent deal for Intel.”

Inspired by the news, Intel's stock price closed up 5.53% to $24.8 on Friday. However, in after-hours trading, the stock price once fell slightly by 1%.

Notably, earlier this week, Intel also announced a $2 billion investment from Japan's SoftBank Group. The announcement of the investment came after media reports that Intel and the Trump administration discussed government shares.