Negotiations Reach 'Significant Breakthrough' for Israeli Intel Plant

A significant breakthrough occurred during negotiations between

Intel

(INTC) - Get Report

and various Israeli government officials about setting up a new plant in Israel and expanding the existing plant at a cost of $3.5 billion, say

finance ministry

officials.

The negotiations dealt with various possible support plans for Intel. The sides agreed that details of the government's support will be hammered out next week by professional teams.

Ha'aretz

reports that Intel's delegation was led by the company's vice president of finance, Robert Perlman, and also included Intel Israel chiefs. The delegation met Sunday with Finance Minister

Avraham Shochat

and other senior officials.

Differences between the two groups centered around government support for Intel's new

Kiryat Gat

plant. Intel wanted an actual subsidy, but the Israeli government offered tax relief instead. Despite the differences, both sides reiterated their interest in setting up the plant and expressed satisfaction with the progress.

Senior government officials said that Shochat assigns much importance to Intel's willingness to invest in Israel in the current situation. "This is an important message for foreign investors," the officials said, "because if Intel believes there is room for investment in Israel, other investors are likely to follow suit."

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