Intel Scraps Tower Acquisition After China Fails to Approve Deal
Intel said on Wednesday it would walk away from its more-than-$5 billion proposed acquisition of Israeli chip maker Tower Semiconductor after failing to win regulatory approval for the deal. The deal required approval from a number of jurisdictions, and China’s State Administration for Market Regulation had yet to sign off by Tuesday’s approval deadline. The Chinese regulator didn’t immediately respond to a request for comment Wednesday.
Intel said it would pay a $353 million termination fee to Tower, in line with the terms of their agreement. Intel had agreed in February 2022 to acquire Tower, which according to its website operates manufacturing facilities in Israel, California, Texas and Japan. The company is based in Migdal HaEmek, near Nazareth in northern Israel.
The demise of the deal comes as the Biden administration ratchets up pressure on China’s chip industry. Last year the U.S. unveiled sweeping export controls on the sharing of American chip technology with China and recently it announced restrictions on investment in China’s chip sector.
Beijing has taken few steps to retaliate, and experts say the country is limited in both its ability and desire to respond in a big way. However, one way Beijing has responded to the increased pressure has been by slow-walking proposed mergers, The Wall Street Journal has reported. Intel initially said it aimed to close the deal in the first quarter of this year, but then extended the expected timeline to the first half.
The company said in April it might terminate the deal if regulatory approvals weren’t received by Aug. 15. “Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future," Intel CEO
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