Intel may abandon acquisition of TowerSEMI, pay $353 million termination fee

【Lansheng Technology Information】Intel is expected to abandon its plan to acquire Israeli contract chip maker TowerSEMI for US$5.4 billion, as the time to obtain regulatory approval has entered the countdown.

The deadline for the deal is midnight on Aug. 15, California time, and the companies do not expect to receive Chinese approval by then. According to Reuters, Intel does not plan to negotiate a contract extension, but will pay Tower a termination fee of $353 million.

When Intel initially announced its plans to acquire Tall Semiconductor, it said it would close the deal within 12 months, in mid-February 2023. But with China's State Administration for Market Regulation (SAMR) yet to approve the deal, the companies extended the deal, extending the acquisition period until mid-June and then again until Aug. 15.

So far, the State Administration for Market Regulation has not officially approved the transaction. If it is not approved on the same day (August 15), Intel and Tower will have to extend the "closed period" again, or cancel the transaction.

Intel Chief Executive Pat Gelsinger recently flew to China to try to persuade Chinese regulators to approve the deal, but the outcome is currently unknown.

If the deal is not approved in China by Aug. 15, Intel and Tower may have to resubmit proposals to regulators in the U.S. or Europe in order to extend the shutdown.

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