Due to escalating tensions with the United States, China refused to approve the $5.4 billion deal for Intel to buy Israeli chipmaker Tower Semiconductor. As a result, the acquisition will no longer take place.
According to statements made by Intel and Tower on Wednesday, it was a mutual decision. The acquisition was scrapped, according to Intel, “due to the inability to obtain in a timely manner the regulatory approvals required under the merger agreement.”
Tower will get a $353 million termination fee from Intel Corp., according to the American semiconductor behemoth.
China’s regulators, who were among those who had to approve the merger, failed not do so by the transaction deadline of August 15 even though Intel CEO Patrick Gelsinger visited China last month in an effort to garner their support.
The partnership between the two businesses was abandoned at a time when tensions between the United States and China are rising, especially in light of recent U.S. restrictions and increased export controls aimed at limiting China’s capacity to import and produce advanced technology.
As a result, it appears that China’s antitrust watchdog, the State Administration for Market Regulation, has been slow to approve mergers involving American corporations, including the Intel-Tower deal.
After failing to get approval from China, Intel revised its timetable from the first quarter of the year to the end of the year. With the purchase of Tower, Intel aimed to increase its manufacturing capacity and create new business prospects for the company in the United States, Israel, Italy, and Japan.
During American pre-market trade, the stock price of Tower decreased by more than 11%. Additionally, the company’s stock price in Tel Aviv fell by more than 10%.
According to a statement from Russell Ellwanger, CEO of Tower Semiconductor, “Tower was very excited to join Intel to enable Pat Gelsinger’s vision for Intel’s foundry business.” “We value the efforts made by all parties,”
