Intel Corp. called off its proposed $5.4 billion acquisition of Tower Semiconductor Inc. and will pay a termination fee of $353 million to its Israeli target.
In a statement released Wednesday, the U.S. semiconductor giant said it would “terminate its previously disclosed agreement to acquire Tower due to the inability to obtain in a timely manner the regulatory approvals required under the merger agreement.”
The deadline for the deal was midnight Tuesday, and Intel had failed to secure approval from China by then, according to a report from Bloomberg.
Intel announced the deal for the Israeli chip maker in February 2022, as part of Chief Executive Pat Gelsinger’s plan to expand Intel’s chip-manufacturing capabilities.
The collapse of the purchase has been expected; its completion has been repeatedly delayed, and U.S.-traded shares of Tower
TSEM,
have sunk 22% year to date while the broader semiconductor industry has rallied.
Intel shares
INTC,
have surged 32% in 2023, while the PHLX Semiconductor Index
SOX
has jumped 40% this year.
Tower makes a wide variety of chips, ranging from those catering to the consumer, industrial, automotive and mobile markets, and has manufacturing facilities —- called “fabs” in industry parlance — in Israel, Italy, California and Texas.
This story originally appeared on Marketwatch
