Tower Semi's US shares slump as Intel drops $5.4 bln acquisition deal

Tower Semiconductor

16/08/2023 09:18

** U.S. shares of Israeli contract chipmaker Tower
Semiconductor Ltd  TSEM.O   TSEM.TA  slip ~10% to $30.26
premarket after Intel Corp  INTC.O  terminates $5.4 bln deal to
buy co 
    ** INTC slips 0.5% in low volumes, premarket 
    ** Intel, which signed deal in Feb 2022, did not get
approval from Chinese regulators on time, sources say; will pay
$353 mln termination fee to TSEM
    ** Failed deal "modestly" disappointing for INTC's foundry
efforts, says Bernstein, as Tower would have provided Intel with
some broader expertise in running a foundry 
    ** Intel's foundry efforts were never going to be easy even
with Tower, but now may prove to be even more challenging
without - Bernstein 
    ** "Overall, we cannot believe that a deal break would be a
shock," brokerage says, noting Intel's muted tone on state of
deal in recent months, and Tower's stock price, at $33.78 as of
last close, still far below $53-per-share deal price
    ** INTC up ~32% YTD; TSEM down ~22%
    

 (Reporting by Susan Mathew in Bengaluru;)
 ((susan.mathew@thomsonreuters.com;))