Applied Materials Inc. (AMAT - Get Report) said Monday it will buy Kokusai Electric Corporation from private equity group KKR in a deal that values the Japan-based semiconductor device maker at around $2.2 billion.
Applied Materials said the deal will be financed by a combination of cash and debt and will be immediately accretive to the company's earnings when the deal is closed in the second half of next year. Applied Materials said its board approved the purchase, which Japan's Nikkei business newspaper said would boost the group's chipmaking equipment market share, already the world's largest, past 20%. Kokusai, a former division of Hitachi, was purchased by KKR in 2017.
"Kokusai Electric has a strong culture of innovation along with excellent customer relationships and serves fast-growing areas of the wafer fab equipment market," said CEO Gary Dickerson. "By bringing Kokusai Electric's talented team into Applied, we believe we will accelerate innovation for customers and create significant value for our shareholders."
Applied Materials shares were marked 4.33% higher at the start of trading Monday to change hands at $46.91 each, a move that would extend the stock's year-to-date gain past 42% and value the Santa Clara, California-based group at just over $43.5 billion.
The opportunity to combine with Applied Materials will be very attractive for Kokusai Electric's customers and employees alike," said Kokusai Electric CEO Fumiyuki Kanai. "We are excited about the opportunity to integrate Kokusai Electric's experienced team with Applied's global development, customer support and services capabilities. We believe the combination will accelerate our ability to bring exciting new technologies to customers."