Intel Corp. will likely call off its proposed $ 5.4 billion acquisition of Tower Semiconductor Inc. after failing to win regulatory approval from China, Bloomberg News reported Tuesday night.
According to the report, the deadline for the deal is midnight Tuesday, and it is unlikely China will give its approval in the final hours.
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 deal has been expected; its completion has been repeatedly delayed, and U.S.-traded shares of Tower TSEM, -0.47% have sunk 22% year to date while the broader semiconductor industry has rallied.
Intel shares INTC, -2.55% 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.