Intel (INTC.O) has announced that it had no plans to sell its majority stake in Mobileye Global (MBLY.O), sending shares of the self-driving tech firm up more than 8 per cent in premarket trading.
Mobileye shares, which are down 73 per cent this year, took a beating earlier in the month after Bloomberg News reported that Intel was looking to sell a portion of its stake in the company.
“We believe in the future of autonomous driving technology and in Mobileye’s unique role as a leader in the development and deployment of advanced driver assistance systems,” Intel said in a statement.
Intel acquired Mobileye in a $15.3 billion deal in 2017 but relisted its shares five years later through an initial public offering.
As of Dec. 30, Intel owned about 88.3 per cent of Mobileye’s common stock, according to the Israeli company’s annual report.
Mobileye has been grappling with choppy demand for its driver-assistance chips. The company cut its annual revenue and profit forecasts in August, hit by weakness in China.
Intel also has been attempting to turn its business around by focusing on its chip foundry unit and artificial intelligence processors, but its shares have plummeted in recent months as it cut jobs, suspended its dividend and faced a high-profile board member resignation.
A chip-making deal with Amazon’s (AMZN.O) cloud division announced on Monday, however, could allow Intel’s manufacturing business to gain some traction as it looks to compete with rivals such as Taiwan Semiconductor Manufacturing Co (2330.TW).
