Intel Tower Semiconductor Deal Falls: Intel Corporation has reportedly decided not to buy Tower Semiconductor Ltd. for $5.4 billion. Intel Corporation has declined the transaction, according to sources. The agreement failed because the Chinese government didn’t approve it before the contract expired on Tuesday, which was intended to happen later in the day. This was initially scheduled for afternoon. The unidentified people stated Intel couldn’t acquire Chinese regulators’ approval in time, thus the agreement to buy the company was scrapped. Thus, people didn’t want to be known.
This newest development underscores how global tensions between the U.S. and China are now hurting commercial dealings, especially in innovation. Corporate deals are reflecting the trade, intellectual property, and Taiwan disputes between the two global powers.
Intel has abandoned the transaction. The corporation will pay Tower Semiconductor a $353 million “breakup fee” instead. This decision was reached when Intel pulled out of the transaction. This maneuver avoids contract extension investigations. Intel’s method is crucial because this strategic effort circumvents it.
No one knows what would have happened if the corporations had sought lengthier contracts while waiting for the government evaluation. Intel and Tower Semiconductor have not publicly addressed this issue. The State Administration for Market Regulation, China’s antitrust regulator, wasn’t available to discuss either.
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Intel CEO Pat Gelsinger was trying to secure Chinese permission for the Tower Semiconductor takeover to help Intel navigate its complex regulatory environment. He did this to get around. Intel’s recent trip to China, where he met with government leaders, showed his commitment. After the Tower transaction, Gelsinger stressed that the company would continue to build its foundry division, which creates chips for other companies. The foundry makes semiconductors for other firms. This was in answer to a query about whether the Tower deal’s end will affect the company’s business focus.
Netanyahu’s announcement that Intel would invest $25 billion in a new factory in Israel transformed Intel’s destiny. Intel’s pivotal moment. The company’s history changed here. This unprecedented foreign investment was lauded by numerous groups.
Buyers knew what would happen after Intel left the deal before it did. Tower Semiconductor’s Nasdaq shares closed Tuesday at $33.78. This is far below the $53 per share sale price.
Intel’s foundry division’ second-quarter sales increased significantly. Sales increased significantly from $57 million to $232 million. Advanced packaging boosted this industry. Intel uses semiconductor components from other companies to produce more powerful computers. Thus, more intricate packaging grew this business segment.
Intel’s CPU sales rose throughout the outbreak due to people working from home. However, a reduction in demand necessitated cost cuts. The corporation plans to save $3 billion this year and $8 billion to $10 billion by 2025.
Our Reader’s Queries
Why did Intel not buy Tower?
Intel Corporation (Nasdaq: INTC) has announced the termination of its agreement to acquire Tower Semiconductor (Nasdaq: TSEM) due to the inability to obtain necessary regulatory approvals in a timely manner. The decision was made mutually between the two companies.
Did Intel abandon $5.4 BN deal to buy Israel’s Tower Semiconductor?
Intel Corp has abandoned its plans to acquire Israeli contract chipmaker Tower Semiconductor Ltd for $5.4 billion. The merger agreement expired without regulatory approval from China, leading to the deal’s cancellation. As a result, U.S.-listed shares of Tower Semiconductor Ltd fell by approximately 11% in premarket trading.
Did Intel call off $5.4 billion chip deal after failing to get regulatory approval?
Intel has withdrawn from a significant acquisition of an Israeli chipmaker due to the inability to secure the necessary regulatory approval.
Did Intel end the deal to buy Tower Semiconductor after failure to gain Chinese regulatory approval?
Intel has abandoned its acquisition of Tower Semiconductor, an Israeli foundry, due to the Chinese regulatory authorities’ refusal to approve the deal. The final deadline for approval was missed, and the deteriorating relationship between China and the United States may have contributed to the decision.