Daily Management Review

Intel backs out from $5.4B purchase of chip maker Tower


Intel has backed out of its $5.4 billion acquisition of Israeli chipmaker Tower Semiconductor after an agreement for the deal expired on August 15 but was never approved by Chinese regulators.

After the agreement on the deal expired on August 15th, Intel declined to purchase Israeli semiconductor manufacturer Tower Semiconductor for $5.4 billion, writes Reuters. According to a press release from Tower Semiconductor, the parties decided to call off the purchase after "failing to receive a response" from the Chinese regulator. Intel will forfeit $353 million to the Israeli business.

According to the agency, the deal's collapse demonstrates how tense relations between the US and China still are in the chip manufacturing sector. Last year, due to delays in receiving approval from Chinese regulators, US DuPont was also forced to renege on its $5.2 billion acquisition of PCB materials manufacturer Rogers Corp.

Last year, Intel made public its acquisition of Tower Semiconductor. At the time, Pat Gelsinger, CEO of Intel, claimed that Tower's specialized technology, global reach, deep customer relationships, and service-oriented operations will assist scale Intel's foundry services and help the company attain its objective of becoming the world's top supplier of foundry capacity.

source: reuters.com