- Applied Materials will pay a termination fee of $154 million in cash to KKR HKE Investment for the deal that was annulled on 19th March.
- Applied Materials had entered the deal in 2019
As per a report by Reuters, Applied Materials has terminated its $2.2-billion deal to buy Japanese peer Kokusai Electric Corp from KKR & Co, it said as it did not get a confirmation of timely approval from China’s regulator. Applied Materials had entered the deal in 2019.
The report added that the chip gear maker had said the deal did not require the approval of U.S. Justice Department, which had forced the company to scrap its $10 billion takeover of Japan’s Tokyo Electron Ltd in 2015. It added that Applied Materials will pay a termination fee of $154 million in cash to KKR HKE Investment for the deal that was annulled on 19th March.
Improving demand for chipmaking gear
In January this year, Applied Materials Inc , said it raised its offer for KKR & Co.-owned Kokusai Electric Corp. by 59 per cent higher valuations in a growing industry. It added that it has extended the closing deadline by almost three months.
Applied Materials said that the large increase reflects improving demand for chipmaking gear and the earnings prospects for the combined entity. It is a part of the growing trend that’s pushed up the valuations of industry companies. It’s making progress toward getting the green light from China‘s State Administration for Market Regulation.
