I agreed to buy an Israeli company
for $5.4 billion as it looks to expand its manufacturing capacity and technology portfolio amid rising demand.
You’ll pay $53 a share in cash to Tower, according to statment Tuesday.
Tower shares (Ticker: TSEM) rose 42.3% to $47.13 on Tuesday. Intel (INTC) stock fell 0.3%.
The deal, which has been approved by the companies’ boards of directors, is expected to expire in about 12 months. Intel’s non-GAAP earnings per share are expected to accrue immediately. Intel said it intends to fund the acquisition with cash from its balance sheet.
Acquisition of Tower would help Intel make up for the loss in the chip industry
Semiconductor manufacturing in Taiwan
Intel said last month that it plans to invest more than 20 billion dollars To set up two chip plants at a new manufacturing site in Ohio. The site could eventually accommodate up to eight chip mills — also known as fabs — across nearly 1,000 acres.
Tower, located in northern Israel, manufactures semiconductors and circuits used in everything from automobiles and consumer products to medical and industrial equipment. The company operates manufacturing facilities in Israel, California, Texas and Japan.
“The acquisition significantly advances Intel’s IDM 2.0 strategy as the company expands its manufacturing capacity, global footprint, and technology portfolio to meet unprecedented demand in the industry,” Intel said.
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