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NEW YORK (Reuters) – Intel Corp (NASDAQ:INTC) will walk away from its $5.4 billion deal to acquire Israeli contract chipmaker Tower Semiconductor (NASDAQ:TSEM) Ltd once the companies’ contract expires later on Tuesday, according to people familiar with the matter.
Intel, which signed the deal to buy Tower in February 2022, did not secure approval from Chinese regulators for the acquisition as required under its contract with Tower, the sources said.
It does not plan to negotiate an extension of the contract, and will instead pay Tower a $353 million break-up fee to walk away, the sources added.
Intel and Tower declined to comment.
