What this means is Applied Materials, which is the world's largest chip equipment maker with a $21 billion market cap, is joining forces with the world's third-largest sector rival with an estimated market cap of $10 billion.
The question is what exactly did Applied Materials accomplish with this deal?
Given the level of business erosion through which Applied Materials has suffered, including a 16% revenue decline in the August quarter, picking off Tokyo Electron makes sense on many levels. Still, while the stock has done well, up more than 50% for the year to date, I haven't seen the sort of outperformance needed from Applied Materials that would support such investor optimism.
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