Applied Materials (AMAT) Increases Bid For Kokusai Electric To $3.5 Billion

By Amit Chowdhry ● January 4, 2021
  • Applied Materials, Inc. (NASDAQ: AMAT) announced it is increasing its offer to buy Kokusai Electric from KKR & Co. These are the details.

Applied Materials, Inc. (NASDAQ: AMAT) announced it is increasing its offer to buy Kokusai Electric from KKR & Co. The offer was increased by 59% due to higher valuations in a growing industry. Plus the closing deadline was extended by nearly 3 months.

As part of the deal, Applied Materials said it would pay KKR $3.5 billion – up from the previously offered $2.2 billion. And the two parties agreed to a new closing date of March 19 in order to receive regulatory approval from China.

Applied Materials said that the increase reflects the improving demand for chipmaking equipment and the earnings prospects for the combined entity. And the company is making progress towards receiving approval from China‘s State Administration for Market Regulation.

“Over the past 18 months, Applied has observed a more favorable long-term outlook for the overall semiconductor equipment market, including positive trends in the memory segment,” said Applied Materials in a regulatory filing via Bloomberg.

KKR had acquired Kokusai Electric (a former Hitachi unit) in 2017. 

Disclosure: I have a small AMAT position in my stock portfolio