Intel is having to do an about-face today. The CPU maker announced that it will no longer acquire the Israel-based semiconductor manufacturing company Tower Semiconductor.
In a press release, Intel says that the two companies had "mutually agreed" to not continue to pursue the deal. Intel previously announced in February 2022 that it would acquire Tower Semiconductor for $4.5 billion in cash. At the time, the company says the purchase would allow it to expand its end-to-end foundry business.
Today's press release stated that Intel was unable to close the deal due to its "inability to obtain in a timely manner the regulatory approvals required under the merger agreement." While Intel did not offer any specifics, Reuters reports that the regulation agency in China did not approve the deal in the time frame that Intel and Tower Semiconductor set up to complete the acquisition.
Intel and Tower Semiconductor apparently did not wish to extend the contract of their deal to see if China would go ahead and approve of the purchase. As a result, Intel will pay Tower Semiconductor a termination fee of $353 million.
Intel CEO Pat Gelsinger tried to put a good spin on this failed acquisition in its press release, stating:
We are executing well on our roadmap to regain transistor performance and power performance leadership by 2025, building momentum with customers and the broader ecosystem and investing to deliver the geographically diverse and resilient manufacturing footprint the world needs. Our respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future.
The company has announced plans to open new factories worldwide in recent months. That includes agreements to build a factory in Dresden, Germany, along with factories in Veneto, Italy and most recently in, ironically, Israel.