Intel has indicated that the U.S. government’s acquisition of its shares could pose a risk to its business and shareholders. On the 25th (local time), Intel pointed out potential issues arising from the U.S. government’s acquisition of Intel shares through a filing with the U.S. Securities and Exchange Commission (SEC). The Trump administration decided on the 22nd to use $8.9 billion from the U.S. Semiconductor Support Act to acquire a 9.9% stake in Intel. This investment would make the U.S. government Intel’s largest shareholder.
Intel initially assessed that the U.S. government’s equity investment could affect its overseas sales. It implies that the company may face additional regulations from other countries and limitations on receiving foreign subsidies.
The Chinese market is a representative case. Amid the U.S.-China trade tensions, having the U.S. government as Intel’s major shareholder could impact various business operations. Last year, 76% of Intel’s sales occurred outside the U.S., with China accounting for 29% of its overseas revenue.
Intel also noted that shares issued to the U.S. government could be priced below the current market value, leading to a dilution of existing shareholders’ equity.
The U.S. government plans to purchase Intel shares at $20.47 per share, approximately 20% lower than the closing price on the 22nd ($24.80). Additionally, the government could influence company decision-making, potentially restricting deals that could benefit shareholders.
There is also a possibility of increased litigation or political and public scrutiny, and changes in the U.S. political landscape could nullify the transaction or pose risks to shareholders.