Some major acquisition news is making headlines this morning. Indeed, Tower Semiconductor (NASDAQ:TSEM) is up over 40% after Intel (NASDAQ:INTC) agreed to buy the company in a deal worth $5.4 billion. In addition, the acquisition will have Intel pay Tower $53 per share of TSEM stock, which represents a 60% premium to its closing price yesterday. Tower is an Israeli-based chipmaker that caters to several markets, such as the automotive, industrial and medical industries. However, shareholders and regulatory officials must approve the deal before it can be closed. So, what else should you know about the billion-dollar deal?
With the acquisition of Tower, Intel seeks to boost its foundry production capabilities. After the transaction closes, Tower will be integrated into Intel Foundry Services (IFS). Furthermore, Tower makes highly specialized chips that Intel currently does not produce. As a result of the buyout, Intel will receive ownership of eight foundry facilities that Tower uses. What’s more, Intel was a customer of Tower before talks leading to the acquisition.
Intel CEO Pat Gelsinger praised the acquisition, commenting, “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.”
TSEM Stock: Intel Buys the Chipmaker for $5.4 Billion
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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