Foreign media: Intel buys Gaota Semiconductor at a premium of 60% or to avoid the intervention of Chinese companies

On February 15, local time, according to foreign media reports, Intel announced the acquisition of Israeli high-tower semiconductor company (Tower Semiconductor) for $5.4 billion. This is equivalent to $53 per share. But the company's last deal was $33 a share, with a premium of as much as 60 per cent.

It is reported that Gaota Semiconductor has obtained more Chinese business and military business. All these are needed to support Intel's strategic direction. In essence, the reason for the premium may be that the deal is killing many birds with one stone.

On the conference call, some analysts seemed to be negative about the acquisition because Gaota Semiconductor has a low profit margin. Most of the companies acquired by Intel have low profit margins, and it is not easy to get higher profit margins in the contract manufacturing sector dominated by TSMC.

The report pointed out that Intel did not buy the company for profit margins or financial position, but obviously complemented Intel's technology in its current position as a contract manufacturer. If Gaota Semiconductor can help Intel become a more capable contract factory, then the purchase price alone will be worth it.

In this acquisition, it would not be surprising if China scrutinized Gaota Semiconductor. China has been watching some Israeli technology companies because of its concern about technological isolation from the United States and the restrictions imposed by the Committee on Foreign Investment in the United States on foreign investment / acquisitions by the Committee on Foreign Investment in the United States ((CFIUS)).

The very high premium for the acquisition could also be a sign of a behind-the-scenes bidding war, or hope to prevent others, such as Chinese companies, from stepping in with more than Intel's bid after the deal is announced, the report said.