Intel Corp (NASDAQ:INTC) agreed to acquire Israeli chip company Tower Semiconductor Ltd (NASDAQ:TSEM) for $53 per share in cash, representing a total enterprise value of ~$5.4 billion.
- The purchase price implies an upside of 60% on the February 14 closing price of $33.13.
- The transaction will likely be immediately accretive to Intel's non-GAAP EPS.
- Earlier Intel neared a deal to acquire Tower Semiconductor for ~$6 billion, the Wall Street Journal reported.
- Tower makes semiconductors and circuits for everything from cars and consumer products to medical and industrial equipment. It has manufacturing facilities in Israel, California, Texas, and Japan.
- Intel's move furthers CEO Pat Gelsinger's goal of contracting semiconductors for other companies, a space dominated by Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM) Bloomberg reports.
- Intel's Ohio site could eventually grow to accommodate eight chip factories or fabs, with spending potentially reaching around $100 billion over the next decade.
- Intel held $6.9 billion in cash and equivalents as of December 25, 2021.
- Price Action: TSEM shares traded higher by 41.50% at $46.89 in the premarket on the last check Tuesday.
- Photo by Capri23auto from Pixabay
