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CNBC's Kristina Partsinevelos reports on news from Intel.
Intel called off a $5.4 billion deal to purchase Tower Semiconductor after it failed to secure timely regulatory approval from China.
Intel has canceled its planned purchase of Tower Semiconductor. Intel walked away from the deal because it couldn't get Chinese regulatory approval.
Tower Semiconductor (NASDAQ: TSEM ) stock is taking a beating on Wednesday after the company's merger agreement with Intel (NASDAQ: INTC ) was terminated. The problem with the deal was Intel being unable to acquire regulatory approval from the Chinese government in a timely manner.
Tower Semiconductor (NASDAQ:TSEM) stock was priced 11% lower in Wednesday's early transactions after Intel Corporation (NASDAQ:INTC) dropped its acquisition of the chip foundry. Intel unexpectedly announced overnight it had axed the US$5.4 billion deal, agreed in late 2022, with unnamed sources near to the deal citing regulatory complications and potential integration challenges.
Intel Corporation (NASDAQ:INTC) has unexpectedly axed its US$5.4 billion acquisition of Tower Semiconductor, with unnamed sources near to the deal citing regulatory complications and potential integration challenges. The deal, struck in late 2022, was previously described as a strategic expansion for Intel, expanding its semiconductor manufacturing capabilities amidst the global chip shortage.
Intel first announced plans to buy Tower Semiconductor in 2022 for $5.4 billion, but is now terminating the deal saying it failed to get regulatory approval.
Intel Corp will walk away from its $5.4 billion deal to acquire Israeli contract chipmaker Tower Semiconductor Ltd once the companies' contract expires later on Tuesday, according to people familiar with the matter.
A pending acquisition by Intel probably isn't a great reason to buy Tower Semiconductor. Tower is in the midst of a downturn, but if the industry rallies, Tower could rally with it.
Tower beat sales and earnings estimates in the second quarter. The stock is also getting a boost from news that Chinese regulators have approved a sale elsewhere in the semiconductor industry.