Applied Materials terminates its acquisition of Kokusai Electric Corporation
Applied Materials, the world’s largest supplier of semiconductor equipment and services, has formally terminated its acquisition of Kokusai Electric.
The reason for the termination of the acquisition was that the Chinese anti-monopoly regulators did not approve the acquisition. Earlier, the Irish, Israeli and Japanese regulators all approved the transaction. However, the Chinese anti-monopoly regulatory agency will not approve the transaction.
According to the acquisition offer at the time, if the acquisition of Applied Materials was not reached in the end, it would be required to pay a termination fee of $154 million to Kokusai Electric, which is the relevant liquidated damages.
As a subsidiary of the former Hitachi Group, Kokusai Electric Corporation mainly manufactures equipment for thin film deposition. Such equipment is mainly used in silicon wafer manufacturing to form circuits.
And Applied Materials itself is the world’s largest supplier of semiconductor equipment and services, and the Chinese mainland market is also the company’s highest revenue share market.
Therefore, the acquisition case needs to be reported to the Chinese anti-monopoly regulatory agency for approval, since the Chinese anti-monopoly regulatory agency will certainly not approve the semiconductor manufacturing industry.
The potential impact of a series of orders issued by the US government that prevented US semiconductor manufacturers or supply chains from cooperating with Chinese companies is very serious.
Including but not limited to Huawei and SMIC have been blocked by the US government, Applied Materials and Kokusai Electric Corporation are important players in the global semiconductor industry.
If the U.S. government continues to block Chinese companies on unwarranted charges, this may result in Kokusai Electric Corporation, which is acquired by U.S. companies, unable to cooperate with Chinese companies. Therefore, from this aspect, it should be expected that the Chinese anti-monopoly agency did not approve this acquisition.
Via: Yahoo Finance
