8-KMaterial AgreementsRegulation FDExhibits & Filings

INTEL CORP 8-K Report, Material Agreement (Jun 1, 2015)

Filed June 1, 2015For Securities:INTC

Summary

Intel Corporation (INTC) announced on May 31, 2015, through an 8-K filing, a definitive agreement to acquire Altera Corporation for $54.00 per share in cash. This represents a significant strategic move by Intel to bolster its presence in the programmable solutions market, particularly for data center and communications infrastructure. The acquisition is valued at approximately $16.7 billion, with Intel intending to fund the transaction using a combination of existing cash reserves and new debt, without relying on external financing. The deal is subject to customary closing conditions, including Altera shareholder approval and regulatory clearances, with a target completion date around the end of 2015, though an extension to August 2016 is possible under certain circumstances. The agreement includes standard provisions such as a "no-shop" clause for Altera, with limited exceptions, and mutual termination fees, including a $500 million fee payable by Altera under certain conditions and a reciprocal fee payable by Intel if antitrust issues prevent the deal.

Key Highlights

  • 1Intel to acquire Altera Corporation in a cash transaction valued at approximately $16.7 billion.
  • 2The acquisition price is $54.00 per share in cash for Altera common stock.
  • 3The deal is expected to enhance Intel's capabilities in programmable solutions and the data center market.
  • 4Intel plans to finance the acquisition with a mix of cash on hand and new debt; no financing contingency is attached to the deal.
  • 5The merger is subject to Altera shareholder approval and antitrust reviews (HSR and foreign approvals).
  • 6The agreement includes customary 'no-shop' provisions for Altera, with a fiduciary out, and mutual termination fees of $500 million.
  • 7The expected closing date is around the end of 2015, with a long-stop date of May 31, 2016, extendable to August 31, 2016.

Frequently Asked Questions

Intel's acquisition of Altera is primarily driven by the desire to enhance its presence in the programmable solutions market, particularly for high-growth segments like data center, communications infrastructure, and the Internet of Things (IoT). Altera's field-programmable gate arrays (FPGAs) are expected to complement Intel's existing processor technologies, enabling the combined entity to offer more comprehensive solutions to customers.

The total value of the acquisition is approximately $16.7 billion. Intel intends to fund this transaction using a combination of cash from its balance sheet and newly issued debt. Importantly, the transaction is not conditioned on Intel securing external financing.

The completion of the merger is subject to several conditions, including the approval of the merger by Altera's stockholders, the expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, receipt of certain foreign antitrust approvals, the absence of any material adverse effect on Altera, and the absence of any legal impediments. Both parties must also fulfill their contractual obligations and ensure the accuracy of their representations and warranties.

Yes, the Merger Agreement includes termination fees. Altera may be required to pay Intel a termination fee of $500 million under specified circumstances. Conversely, Intel may be required to pay Altera a $500 million termination fee if the merger is terminated due to specific antitrust or competition-related legal requirements not being satisfied.