Intel abandons purchase of Israel's Tower Semiconductor: $5.4 billion deal collapses

(Patria) - Intel Corporation has terminated a $5.4 billion deal to acquire Tower Semiconductor in Israel after failing to obtain necessary regulatory approval, the American chipmaker announced.

According to a Bloomberg report, Chinese regulators were apparently the obstacle, showing no
signs of approving the merger agreed upon early last year. Intel will pay Tower $353 million in termination fees in accordance with the terms of the agreement, the companies said in a statement.

"Tower was very excited to join Intel to enable Pat
Gelsinger's vision," said CEO Russell Ellwanger, referring to his Intel counterpart.

Tower and Intel agreed to abandon the deal after "there were no indications regarding certain regulatory approvals" by the deadline for the merger agreement, AP recalls.

"Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future," said Intel CEO Pat Gelsinger in a statement.

Intel sought to strengthen its chip manufacturing services portfolio through the merger, as Tower specializes in analog semiconductors used in cars, medical devices, and security cameras. The reported delay by Chinese regulators comes amid growing tensions in US-China relations, with the semiconductor industry at the center of the dispute.

California-based Intel is considered a key tool for the United States to reduce its dependence on major global manufacturers, such as Taiwan's TSMC.
US President Joe Biden issued an executive order last week aimed at
restricting certain US investments in sensitive high-tech areas in China.