Tokyo Electron shares sink after takeover by Applied Materials scrapped

By on April 28, 2015

TOKYO (Reuters) – Tokyo Electron Ltd (8035.T) shares plunged 15 % on Tuesday to a six-month low after U.S. regulatory opposition forced the scrapping of its deliberate takeover via U.S.-based totally Utilized Materials Inc (AMAT.O).

The all-share buy – a uncommon international bid for a Japanese firm – would have blended the No.1 and No. Three makers of the equipment that makes semiconductor chips into a bunch with a inventory market value of more than $ 38.5 billion.

Analysts had at the beginning expected the takeover, aimed at spurring revenue increase in each corporations, to face up to regulatory scrutiny.

Tokyo Electron shares fell as so much as 14.8 % in early trade to 6,555 yen, hitting their lowest level given that late October, while the broader Tokyo market .TOPX was once up 0.6 p.c.

The slide got here despite Tokyo Electron announcing it plans to purchase as so much as A Hundred And Twenty billion yen ($ 1 billion) worth of shares, or Eight.59 % of its distinguished inventory.

A Tokyo-based totally mergers and acquisitions attorney said the unraveling of the deal was once worse for Tokyo Electron as takeover pursuits frequently lose management focal point, and consumers, right through the negotiation duration.

Utilized Materials, Tokyo Electron and No. 2 maker, ASML Preserving NV (ASML.AS), Hold 49 percent of the global market, in line with market analysis agency Gartner, in an business the place the rising price of creating chips, coupled with slowing semiconductor demand, are forcing alliances and acquisitions.

(Reporting through Chang-Ran Kim and Hideyuki Sano; Modifying by using Edwina Gibbs)


Reuters: Trade News

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