Applied Materials Announces Termination of Kokusai Electric Acquisition Agreement

Rhea-AI Summary

Applied Materials announced the termination of its share purchase agreement with Kokusai Electric Corporation due to lack of timely approval from Chinese regulators. As a result, Applied will pay KKR a termination fee of $154 million. CEO Gary Dickerson expressed disappointment but noted a strong future outlook, emphasizing the company's potential for growth and cash returns to shareholders. The company's leadership in materials engineering solutions positions it well within the semiconductor and display manufacturing sectors.

Positive

• Strong future outlook for growth and cash returns.
• Continued leadership in materials engineering solutions.

Negative

• Termination fee of $154 million payable to KKR.
• Failed acquisition may impact investor sentiment.

SANTA CLARA, Calif., March 29, 2021 (GLOBE NEWSWIRE) -- Applied Materials, Inc. today announced that the amended Kokusai Electric Corporation share purchase agreement with KKR HKE Investment L.P. terminated as of March 19, 2021 as Applied did not receive confirmation of timely approval from the regulator in China. Applied is paying KKR a termination fee of $154 million in cash.

“While we are disappointed that the transaction will not be completed, Applied Materials’ future outlook has never been better,” said Gary Dickerson, president and CEO of Applied Materials. “Our innovations are accelerating our customers’ roadmaps and we have outstanding opportunities to extend our technology leadership, drive profitable growth and deliver attractive cash returns to shareholders.”

About Applied Materials
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible the technology shaping the future. Learn more at www.appliedmaterials.com.

Contact:
Ricky Gradwohl (editorial/media) 408.235.4676
Michael Sullivan (financial community) 408.986.7977

FAQ

What led to the termination of the Kokusai Electric acquisition by Applied Materials?

The acquisition was terminated due to Applied Materials not receiving timely approval from Chinese regulators.

What is the termination fee Applied Materials will pay KKR?

Applied Materials will pay KKR a termination fee of $154 million.

How does the termination of the acquisition affect Applied Materials' future?

Despite the termination, CEO Gary Dickerson highlighted a positive outlook for growth and cash returns.

What is the impact of the Kokusai Electric acquisition termination on AMAT stock?

The termination may have a negative impact on investor sentiment and stock performance.