Applied Materials to acquire Kokusai from KKR for $2.2b

Bloomberg

Applied Materials Inc, one of the largest makers of machines used to make semiconductors, is to buy Kokusai Electric from KKR & Co in a deal worth about $2.2 billion.
Kokusai Electric will operate as a business unit of Applied’s Semiconductor Products Group and continue to be based in Tokyo, according to a statement.
The deal is expected to close within 12 months, and Applied Materials is to finance the transaction using a combination of balance sheet cash and a term loan facility, the statement added.
Applied Material shares were up 3.2 percent in pre-market trading in New York on Monday.
California-based Applied Materials dominates the market for equipment involved in the early stages of turning wafers of silicon into computer chips. Its main customers are Samsung Electronics Co, Intel Corp and Taiwan Semiconductor Manufacturing Co. Applied Materials, based in Santa Clara, California, went on a sales growth spurt under Chief Executive Officer Gary Dickerson as chipmakers ordered more machinery to help solve the increasing complexity of making semiconductors.
Investment firm KKR bought the Japanese mobile phone and wireless equipment manufacturer, a former Hitachi Ltd unit, in a tender offer in 2017. Before the deal closed, KKR made a bid that valued Kokusai Electric at $3 billion yen, although it’s not clear how much KKR ultimately paid.
The $470 billion chipmaking industry has been consolidating rapidly over the past half-decade, putting pressure on suppliers like Applied Materials to bulk up in turn.
Applied Materials sought to merge with Tokyo Electron in 2015, but the deal was scrapped amid opposition from the US Department of Justice. Dickerson had planned to move to Japan to run the combined company.
The proposed deal by Applied Materials to buy Kokusai Electric, is likely to face scrutiny from regulators.