Intel Is Exploring Sale of Part of Stake in Mobileye

(Bloomberg) — Intel Corp. is considering options for its stake in its struggling automated driving systems provider Mobileye Global Inc. as part of a major strategy overhaul, people with knowledge of the matter said.

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The chipmaker could offload some of its 88% holding in Mobileye on the public market or via a sale to a third party, according to the people, who asked not to be identified because the information was private. Mobileye has a board meeting later this month in New York, where Intel’s plans will be considered, one of the people said.

Founded in 1999, Mobileye provides software and hardware for self-driving systems. The Jerusalem-based company went public via a US initial public offering in 2022. Intel sold part of its stake in Mobileye last year, raising about $1.5 billion from the deal.

If Intel pushes ahead with trying to raise money using more of its holding in Mobileye, it will be doing it at a difficult time. Mobileye’s stock is down about 71% this year, leaving it with a market value of roughly $10.2 billion, and the company is on course for a third-straight annual loss.

Mobileye has suffered as automakers have reduced production amid a post-pandemic supply glut across the industry. Last month, it slashed revenue forecasts and lowered its projection for adjusted operating income to well below what analysts were projecting.

The latest deliberations over Mobileye form part of broader discussions between Intel and its advisers on ways to improve performance and navigate the most difficult period in its 56-year history. Bloomberg News reported last month that the company is studying a range of strategic scenarios, including potential M&A.

Network Unit

Santa Clara, California-based Intel is separately exploring options for its enterprise networking division, the people said. The business, which is called Network and Edge and manufactures chips for use in computer and telecommunications networks, saw revenue fall by almost a third last year to about $5.8 billion, results for the period show.

Intel has made no final decisions on its stake in Mobileye, or the networking business, the people said, asking not to be identified discussing confidential information.

A representative for Intel responded in an emailed statement, “We have an unwavering focus on shareholder value creation and are executing the plan we shared last month to accelerate profitable growth and create a leaner, simpler and more agile Intel for the future.”

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A spokesperson for Mobileye declined to comment.

Pat Gelsinger, Intel’s chief executive officer, has launched an ambitious plan to regain his company’s lead in the semiconductor industry by building new plants and rapidly improving its manufacturing technology.

Intel had a net loss of $1.61 billion last quarter, and analysts are predicting more red ink for the year ahead, putting pressure on Gelsinger to pull off a turnaround. The company’s board is expected to be presented with various strategic options during a meeting later in September.

–With assistance from Dinesh Nair.

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