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Deal between Applied Materials and Kokusai Electric finally collapses
As recently as last week, there were all signs that Chinese antitrust authorities would not approve Applied Materials’ deal to buy Japanese lithography equipment supplier Kokusai Electric on time. This is exactly what happened in the end, now the failed buyer will pay the Japanese side $ 154 million forfeit.
Image source: Reuters
The American company Applied Materials is one of the leading manufacturers of lithographic equipment, and Kokusai Electric was spun off from the Hitachi holding, the main owner is the Japanese investment company KKR. The latter now, as noted by the Nikkei Asian Review, intends to take Kokusai Electric to a public offering to raise capital. If the deal with Applied Materials had taken place, Kokusai Electric’s assets would have allowed KKR to raise $ 3.5 billion.
Chinese antitrust authorities have increased the processing time of the application three times, in total, studying the terms of the deal for nine months. Industry experts said Chinese regulators were concerned about the restrictions on access to lithographic equipment that the United States imposes on Chinese manufacturers. This was the main obstacle to the approval of the deal between Applied Materials and KKR. Japanese regulators, however, approved the deal because they felt that Applied Materials and Kokusai Electric were producing equipment for different purposes, not competing with each other.