In a press release in the early hours of Wednesday, Intel said it has mutually agreed to terminate its plans to acquire Israeli contract chipmaker Tower Semiconductor as they involve risks and uncertainties. The firms entered into the $5.4 billion merger agreement in February last year.
“Such statements involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied, including changes in demand for Intel’s products; Intel’s failure to realize the anticipated benefits of its strategy, plans, and proposed transactions; and the high level of competition and rapid technological change in the semiconductor industry.”
According to the American multinational corporation, it terminated the tower acquisition deal because it was unable to get timely regulatory approvals for the contract. Meanwhile, Intel said it would be paying a termination fee of $353 million to Tower by the terms of the agreement.
“…Cybersecurity and privacy risks; investment and transaction risk (such as the inability to timely obtain regulatory approval for the proposed acquisition of Tower Semiconductor); IP risks and risks associated with litigation and regulatory proceedings…”
Affirming the mutual termination, Tower Semiconductor said in a statement that: “After careful consideration and thorough discussions and having received no indications regarding certain required regulatory approval, both parties have agreed to terminate their merger agreement having passed the August 15, 2023, outside date.”
Intel’s Tower acquisition deal aims to advance its plans to create a world-class system foundry as part of its IDM 2.0 strategy through Intel Foundry Services (IFS). Over the year, the firm’s IFS has made significant strides as demonstrated by its more than 300% year-over-year revenue increase in the second quarter of 2023.
