Intel has agreed to sell a 51% stake in its Altera programmable chip business to buyout firm Silver Lake for $4.46 billion, in the first major move under new CEO Lip-Bu Tan to revive the struggling American chipmaker.

The deal, announced on Monday, values Altera at $8.75 billion, a sharp decline from the $17 billion Intel paid in 2015.

Intel stock gained 4% after the news.

The sale will provide Intel a cash boost as the chipmaker aggressively cuts costs to bolster its balance sheet, while it invests in a capital-intensive undertaking to become a contract manufacturer.

Since last year, Intel has taken steps to spin Altera out as a separate unit and said it planned to sell a portion of its stake.

"Today"s announcement reflects our commitment to sharpening our focus, lowering our expense structure and strengthening our balance sheet," CEO Tan, who took the helm after former top boss Pat Gelsinger's ouster, said.

Altera makes programmable chips that can be used for various purposes from telecom equipment to military.

Reuters had first reported in November that Silver Lake was among potential suitors competing for a minority stake in Altera.

The deal is expected to close in the second half of 2025, after which Intel expects to deconsolidate Altera's financial results from Intel's financial statements, the company said.

In 2024, Altera generated revenue of $1.54 billion and posted an operating loss of $615 million.

Raghib Hussain, who was an executive at custom AI chipmaker Marvell Technology, will succeed Sandra Rivera as Altera CEO from May 5, Intel said.