Wed, Oct. 21, 11:33 AM
- Up yesterday in response to Intel's flash manufacturing plans, chip equipment makers are higher today after Lam Research (LRCX +5.6%) announced it's buying KLA-Tencor (KLAC +22.5%) for $10.6B, with the goal of creating an industry giant on par with Applied Materials (AMAT +1%).
- In addition to Lam, KLA, and Applied, gainers include ASML (ASML +2.3%), Kulicke & Soffa (KLIC +2.9%), Teradyne (TER +4.6%), Mattson (MTSN +2.6%), and Xcerra (XCRA +2.3%). Ahead of the deal announcement, Tokyo Electron (OTCPK:TOELF) rose 4% in Tokyo, aided by the Intel news and a rally in Japanese equities.
- Lam/KLA assert the deal combines "Lam's best-in-class capabilities in deposition, etch, and clean [equipment] with KLA-Tencor's leadership in inspection and metrology." Gartner estimates Lam and KLA respectively had 9.4% and 6.4% of the 2013 chip equipment market. Applied (competes with both KLA and Lam) had 16.2%, ASML (dominant in lithography) 15.7%, and Tokyo 9.1%.
- Lam is paying the equivalent of $32/share in cash and 0.5 shares (current value of $37) for each KLA share. It plans to finance the deal with $1.9B in cash on hand from both companies, and $3.9B in debt. KLA shareholders can elect to be paid solely in cash, solely in stock, or through a mixture of cash and stock.
- The deal is expected to close in mid-2016. Lam CEO Martin Anstice will run the combined firm.
Thu, Feb. 19, 11:54 AM
- South Korea's Fair Trade Commission plans to conditionally approve Applied Materials' (NASDAQ:AMAT) merger with Tokyo Electron (OTCPK:TOELF +5%). The regulator adds it's talking with peers in six countries (inc. the U.S. and Japan) to nail down details for approving a deal.
- A government official says Applied/Tokyo have agreed "not to launch combined chemical vapor deposition (CVD) and atomic layer deposition (ALD) businesses in Korea," and to also "establish new entities for fair competition, if necessary."
- The announcement comes after Samsung and SK Hynix had voiced objections to the deal, which stands to create a colossus possessing ~25% of the global chip equipment market. The DOJ was reported in December to be vetting a buyer for assets Applied/Tokyo plan to divest to win U.S. regulatory approval.
- Separately, Applied has filed proxy materials for its 2015 annual meeting (set for April 2). The company discloses CEO Gary Dickerson's compensation rose 59% in 2014 to $16.4M, thanks in part to a cash grant meant to avoid an excise tax that would apply to stock option awards following the closing of the Tokyo Electron deal.
Sep. 24, 2013, 10:00 AM
- Applied Materials (AMAT +6.4%) continues to shoot higher after announcing a $29B all-stock merger with fellow chip/LCD equipment maker Tokyo Electron (TOELF.PK), a move that stands to create an industry behemoth. Among chip equipment peers, only ASML (ASML +1.4%) comes close to matching AMAT/Tokyo Electron in size.
- ASML and Lam Research (LRCX +2.1%) are up moderately in response to the deal, while KLA-Tencor (KLAC) is nearly unchanged. Tokyo Electron closed up 11.7% in Japan.
- Tokyo Electron had FY13 (ended March '13) revenue of ¥497.3B ($5.03B). Applied is expected to generate FY13 (ends Oct. '13) revenue of $7.53B.
- The combined company will have dual HQs in Tokyo and Santa Clara (there could be both integration and cultural challenges). Tokyo Electron chairman/CEO Tetsuro Higashi will be chairman, while new/well-respected Applied CEO Gary Dickerson will be CEO.
- Applied and Tokyo assert the merged company's unmatched materials engineering capabilities will give it an edge in the mobile chip and display equipment markets. The deal is expected to close in "mid to second half of 2014."
- The chip equipment industry has already seen plenty of consolidation; the Lam Research-Novellus and ASML-Cymer deals are two notable examples. Will Applied-Tokyo Electron fuel additional M&A activity?
Aug. 13, 2012, 11:49 AMTop Japanese chip equipment maker Tokyo Electron (TOELF.PK) is buying U.S. peer FSI International (FSII +52.4%) for $6.20/share, or $252.5M, in cash. The price represents a 53% premium to FSI's Friday close. The deal, which will strengthen TEL's wafer surface preparation offerings, could be weighing a little on Lam Research (LRCX -1.4%), which bought Novellus partly for its surface preparation tech. (PR) | Aug. 13, 2012, 11:49 AM | Comment!
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