Intel is terminating a $5.4 billion settlement to amass Israeli chip producer Tower Semiconductor after China didn’t log off on the deal amid deteriorating US-China relations
FILE – The Intel emblem is displayed on the outside of Intel headquarters in Santa Clara, Calif., Jan. 12, 2011. Intel Corp. mentioned Wednesday, Aug. 16, 2023, it will terminate a $5.4 billion deal to amass Israeli chip producer Tower Semiconductor, after China didn’t log off on the deal amid deteriorating US-China relations. (AP Picture/Paul Sakuma, File)
The Related Press
HONG KONG — Intel will terminate a $5.4 billion deal to amass Israeli chip producer Tower Semiconductor after China didn’t log off on the deal amid rising tensions with the USA.
It was a mutual resolution between Intel and Tower, the businesses mentioned Wednesday. Intel mentioned that the deal was terminated “because of the lack of ability to acquire in a well timed method the regulatory approvals required below the merger settlement.”
Intel Corp. pays Tower a termination price of $353 million, the U.S. semiconductor big mentioned.
The deal required regulatory approval from a number of regulators worldwide together with China, however Chinese language regulators didn’t greenlight the deal by the Aug. 15 transaction deadline, even after Intel CEO Patrick Gelsinger traveled to China final month in a bid to win them over.
The scuttled deal between the 2 firms comes amid growing U.S.-China tensions, significantly because the U.S. has tightened export controls and imposed restrictions aimed toward crippling China’s capability to buy and manufacture superior chips.
In response, China’s antitrust regulator, the State Administration for Market Regulation, seems to have dragged its toes on approving mergers involving American firms, such because the Intel-Tower deal.
Intel initially aimed to shut the deal by the primary quarter of the 12 months, however later prolonged the deadline after it didn’t obtain approval from China. Intel hoped that its acquisition of Tower would increase its manufacturing capability and open up development alternatives for the agency in U.S., Israel, Italy and Japan.
Tower’s inventory worth fell greater than 11% in pre-market buying and selling within the U.S. The corporate’s inventory worth in Tel Aviv additionally plunged over 10%.
“Tower was very excited to hitch Intel to allow Pat Gelsinger’s imaginative and prescient for Intel’s foundry enterprise,” mentioned Russell Ellwanger, Tower Semiconductor’s CEO in a press release. “We admire the efforts by all events.”
