Applied Materials discontinues $2.2 billion acquisition of Japan’s Kokusai Electric

Applied Materials has terminated its $2.2-billion deal to acquire Japanese peer Kokusai Electric Corp. from KKR & Co. after failing to get a confirmation of timely approval from China’s regulator.

The termination comes as trade relations between the US and China become increasingly strained.

The Santa Clara, California-based Applied Materials had entered the deal in 2019, anticipating a rise in demand for memory chips used in 5G phones, AI-powered devices, and data centers.

According to Applied Materials, the deal did not require the approval of the US Justice Department.

Applied Materials will pay a termination fee of $154 million in cash to KKR HKE Investment for the deal, which was annulled on March 19.