Intel To Acquire Tower Semiconductor In $5.4 Bln Cash Deal - Quick Facts

(RTTNews) - Chip giant Intel Corp. (INTC) announced Tuesday a definitive agreement to buy Israeli chip company Tower Semiconductor Ltd. (TSEM) for $53 per share in cash. The deal represents a total enterprise value of approximately $5.4 billion.

In pre-market activity on Nasdaq, Tower shares were gaining around 45 percent to trade at $47.87.

The transaction is expected to be immediately accretive to Intel's adjusted earnings per share. Intel intends to fund the acquisition with cash from the balance sheet.

The deal has been unanimously approved by both companies' boards of directors. The transaction is expected to close in approximately 12 months, subject to certain regulatory approvals and customary closing conditions, including the approval of Tower's stockholders.

The company noted that Intel Foundry Services or IFS and Tower Semiconductor will run independently until deal closure. IFS will continue to be led by Randhir Thakur, president, and Tower will continue to be led by Russell Ellwanger, Tower CEO during this time.

Upon the close of the transaction, Intel's intent is for the two organizations to become a fully integrated foundry business. The company will share more details on integration plans at that time.

Intel said the acquisition significantly advances its IDM 2.0 strategy as the company further expands its manufacturing capacity.

Goldman Sachs & Co. LLC served as financial advisor to Intel, and J.P. Morgan Securities LLC served as financial advisor to Tower.

Tower will issue its fourth-quarter and fiscal year 2021 financials on February 17.