Intel announced today that it struck a $5.4 billion deal with the Israeli chip company. The tech giant will pay $53 per share in cash for Tower, a 60% premium to Monday’s close.
The deal is part of Intel’s manufacturing capacity strategy, designating up to $28 billion for 2022 back in October. It recently revealed that it would spend more than $20 billion to build a mega manufacturing facility in Ohio and $20 billion for sites in Arizona. These efforts and spending were met with concern by market experts because the spending affects the company’s gross margins.
According to Intel, the acquisition will immediately lift its adjusted earnings per share upon closing, and it will be funded with cash from the balance sheet.
At the moment of writing, Intel’s stock price was trading 1.07% higher.
Sources: marketwatch.com, wsj.com
