In a move that reflects strained relations between the US and China, Intel Corporation has opted to shelve its planned $5.4 billion acquisition of Tower Semiconductor, an Israeli chipmaker. The decision, announced jointly by the two companies on Wednesday, stemmed from the inability to obtain timely regulatory approvals required by the merger agreement.
The mutual agreement between Intel and Tower marks a notable change, with Intel now required to pay a $353 million termination fee to Tower, the semiconductor giant confirmed.
Under the terms of the deal, numerous global regulators had to give their approval, including Chinese authorities. Despite the efforts of Intel CEO Patrick Gelsinger, who personally visited China last month to gain regulatory support, Chinese regulators did not give the green light by the August 15 deadline for the transaction.
This development comes against the backdrop of rising tensions between the US and China, specifically due to strict US-imposed export controls and restrictions aimed at curbing China’s access to advanced chips for both the purchase as for production.
China’s antitrust authority, the State Administration for Market Regulation, appears to have delayed approving mergers with US entities, as seen with the Intel-Tower deal.
Originally scheduled to close in the first quarter of the year, the deal was extended by Intel after Chinese approval was pending. The acquisition was expected to increase Intel’s manufacturing capabilities and drive growth
This article is sourced from and written by AI.
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