Intel scales down VMware investment

Intel plans to sell half of its stake in virtualisation firm VMware, according to a regulatory filing with the US Securities and Exchange Commission.

The chip maker is to get rid of 4.75 million of the 9.5 million shares it purchased in July 2007 for $219m (£137m).

Intel has already offloaded 500,000 shares apiece to Cisco and EMC, the parent companies of VMware, for around $26 a share, and said it will sell the remaining 3.75 million "approximately" on Tuesday.

The firm originally paid $23 per share for the stock, which peaked at $125.25 last October.

For its part, Cisco looks set to forge even closer ties to VMware after a number of joint announcements at this year's VMworld show. The networking giant will end up with about eight per cent of VMware's stock.