Intel Strikes $5.4B Deal for Tower Semiconductor; Pat Gelsinger Quoted

Intel (Nasdaq: INTC) has agreed to acquire Tower Semiconductor (Nasdaq: TSEM) for $53 per share in cash, or approximately $5.4 billion, in a transaction that will create an end-to-end foundry to meet the increasing demand for semiconductors worldwide.

The boards of the two companies have unanimously approved the deal that is expected to be completed in the next 12 months, subject to approval of Tower’s stockholders, regulatory clearances and other customary closing conditions, the companies said in a joint release Tuesday.

“This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors,” said Intel CEO Pat Gelsinger.

Upon the deal’s completion, Intel will integrate Tower with Intel Foundry Services, which launched in March 2021 as part of the parent company’s new integrated device manufacturing strategy, called IDM 2.0, to help advance innovation and drive product leadership. Randhir Thakur, president of IFS, will continue to lead the business unit until the transaction’s closure.

Tower provides radio frequency, silicon-germanium, power, industrial sensors, integrated circuits and other specialty technologies for aerospace and defense, industrial, mobile, medical and automotive markets, among other sectors.

Tower CEO Russell Ellwanger said the company looks forward to being a part of Intel’s foundry offering to help drive new growth opportunities and further support clients through a suite of technology platforms and nodes and a global manufacturing presence.

Intel intends to use existing cash to fund the acquisition, which is expected to be immediately accretive to the company’s non-GAAP earnings per share.

Goldman Sachs & Co. served as Intel’s financial adviser, while Skadden, Arps, Slate, Meagher & Flom and Yigal Arnon & Co. acted as legal advisers. J.P. Morgan Securities advised Tower on the deal’s financial aspect, while Latham & Watkins and FISCHER (FBC & Co.) served as legal advisers to Tower.