8-KRegulation FD

INTEL CORP 8-K Report, Regulation FD Disclosure (May 7, 2008)

Filed May 7, 2008For Securities:INTC

Summary

Intel Corporation (INTC) has announced its participation in a significant transaction involving Clearwire Corporation and Sprint Nextel Corporation. The core of this event is a proposed merger and asset contribution that will create a new entity, Newco, focused on deploying a nationwide mobile WiMAX network. Intel, through its investment arm Intel Capital, has committed to investing up to $1.0 billion into this new venture. This strategic investment positions Intel as a key stakeholder in the emerging mobile broadband landscape, particularly in the WiMAX technology. The company's involvement is not merely financial; Intel also plans to integrate WiMAX chipsets into its processor technologies and collaborate with OEMs to embed these into laptops and mobile devices, potentially driving adoption of the new network. This move signifies Intel's commitment to expanding its presence beyond traditional computing into the mobile internet space.

Key Highlights

  • 1Intel Capital to invest up to $1.0 billion in Newco, a newly formed entity from a Clearwire and Sprint transaction.
  • 2Newco will focus on deploying a nationwide mobile WiMAX network for mobile broadband services.
  • 3The investment is part of a larger funding round of up to $3.2 billion from various strategic partners including Comcast, Time Warner Cable, and Google.
  • 4Intel will work with OEMs to embed WiMAX chipsets into Intel® Centrino 2® processor technology-based laptops and other mobile devices.
  • 5Intel will have the option to become a mobile virtual network operator (MVNO) to resell Newco LLC’s mobile WiMAX service.
  • 6Intel's ownership in Newco is projected to be approximately 12% on a fully diluted basis, subject to stock price adjustments.
  • 7Intel will have the right to nominate one director to Newco’s 13-member Board of Directors.

Frequently Asked Questions

This 8-K filing discloses Intel's significant investment and strategic involvement in a proposed transaction that will create a new company, Newco, focused on building and operating a nationwide mobile WiMAX network. Intel Capital is committing up to $1.0 billion to this venture.

Intel will become a major shareholder in a company poised to deploy next-generation mobile broadband. Beyond financial returns, Intel plans to leverage this by integrating WiMAX chipsets into its processors and collaborating with manufacturers to promote the use of these devices on Newco's network. Intel also has an option to act as a mobile virtual network operator.

The consummation of the proposed transactions is subject to several conditions, including approval by Clearwire shareholders, antitrust clearances (Hart-Scott-Rodino Act), absence of certain contract terminations, FCC consent for spectrum lease transfers, and other customary closing conditions.

Intel has made prior investments in Clearwire, totaling $620 million ($20 million in October 2004 and $600 million in August 2006). Before this new transaction, Intel beneficially owned 25.4% of Clearwire's equity and held 29.9% of its voting power.