Tokyo Electron and Applied Materials back off merger plan

LONDON (ShareCast) - US equipment manufacturer Applied Materials (NasdaqGS: AMAT - news) and Japanese electronics and semiconductor company Tokyo Electron are to ditch their merger plan, both companies confirmed on Sunday, citing concerns expressed by the US Department of Justice.

The DoJ had warned both companies that their merger proposal submitted to regulators "would not be sufficient to replace the competition lost from the merger".

"We viewed the merger as an opportunity to accelerate our strategy and worked hard to make it happen," said Applied Material's chairman and CEO Gary Dickerson.

"While we are disappointed that we are not able to pursue this path, our existing growth strategy is compelling. We have been relentlessly driving this strategy forward and we have made significant progress towards our goals," Dickerson added.

The announcement came nearly two years after the US-based Applied Materials agreed in September 2013 to buy Tokyo Electron, in a deal that would have created a company with an estimated value of $29bn. (£19.1bn).