On the morning of Wednesday, Aug. 16, microchip giant (NASDAQ: INTC) terminated its proposed buyout of analog semiconductor foundry Tower Semiconductor (NASDAQ: TSEM). The all-cash acquisition had been in the works since February 2022, but the two companies couldn't get the necessary regulatory sign-offs after 18 months.

The key holdout was China, whose approval was needed because Intel has manufacturing facilities there. The deal reached a standstill amid rising geopolitical tension and a global wave of inflation-based economic pressure. In the end, Chinese regulators never signed the agreement, resulting in a canceled contract.

So instead of a $5.4 billion check to close the deal, Intel is sending $353 million to Tower as a termination fee. Is the canceled deal a disaster for Intel and Tower, or does the termination come with a silver lining for investors?

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Source Fool.com