Applied Materials, Tokyo Electron Deal Called Off On Competitive Concerns

(RTTNews) - Applied Materials, Inc. (AMAT) and Tokyo Electron Limited said they have agreed to terminate their Business Combination Agreement, citing anti-trust issues. No termination fees will be payable by either party. Shares of Applied Materials fell over 5 percent in pre-market activity.

The decision came after the U.S. Department of Justice advised the parties that the remedy proposal submitted to all regulators would not be sufficient to replace the competition lost from the merger. Based on the DoJ's position, Applied Materials and Tokyo Electron have determined that there is no realistic prospect for the completion of the merger.

The two companies had agreed on the all-stock merger, worth $9.4 billion, in September 2013.

Gary Dickerson, president and CEO of Applied Materials, said, "We viewed the merger as an opportunity to accelerate our strategy and worked hard to make it happen. While we are disappointed that we are not able to pursue this path, our existing growth strategy is compelling."

Separately, Applied Materials said its Board of Directors has approved a new share repurchase program authorizing up to $3 billion in repurchases over the next three years beginning in the third quarter of fiscal 2015.

Tokyo Electron also said in another statement that it would buy back stock. The company plans to repurchase up to 15.4 million shares, between May 14, 2015 and May 13, 2016, for up to 120 billion yen.

Last Friday, Cable television operator Comcast Corp. (CMCSA, CMCSK) said its merger with Time Warner Cable, Inc. (TWC) and its deal with smaller rival Charter Communications, Inc. (CHTR) have been terminated after the DoJ and Federal Communications Commission cited harm to consumer interest and competition.

AMAT, which closed at $21.80 on Friday, fell 8.26 percent in pre-market activity on Monday.

Tokyo Electron fell 1.5 percent on Monday in Tokyo to settle at 7,697 yen.