Jul 1, 2019

Applied Materials to buy Japanese chipmaker Kokusai Electric for $2.2 billion

Applied Materials agreed to buy Japanese chip-making equipment company Kokusai Electric from KKR for around $2.2 billion in cash.

Why it matters: It reflects the secondary deal effects of consolidation, as rampant chipmaker mergers have put pressure on suppliers like Applied Materials to also supersize. It also comes three years after Applied Materials was blocked by U.S. regulators from buying another Japanese chip company, Tokyo Electron, and on the same day that chip stocks are surging on President Trump's policy reversal on Huawei.

  • ROI: KKR paid around $2.2 billion in 2017 to buy Hitachi Kokusai, which essentially included two different companies. One of them is being sold in this deal, while KKR continues to own the other (which makes video and communications equipment).

The bottom line: "The acquisition will expand Applied Materials' product lineup at a time when the semiconductor industry is racing to develop more advanced chips for applications including 5G networks and artificial intelligence... The U.S. company's market share is expected to rise to more than 20% from 18% after the acquisition," writes Nikkei, which first broke the deal news.

Go deeper: Computer chips are still "Made in USA"

Go deeper

Why Apple may move to open iOS

Photo illustration: Jakub Porzycki/NurPhoto via Getty Images

Apple may finally allow iPhone owners to set email or browsing apps other than Apple's own as their preferred defaults, according to a Bloomberg report from last week.

The big picture: Customers have long clamored for the ability to choose their preferred apps, and now Apple, like other big tech companies, finds itself under increased scrutiny over anything perceived as anticompetitive.

The NFL warms up to betting

Photo: Jim McIsaac/Getty Images

Starting this season, NFL teams in states with legal sports betting will be allowed to have in-stadium betting lounges and accept sponsorships from sportsbooks and betting operators, per multiple reports.

One caveat: There will not be any physical betting windows in the lounges, so they're more "hangout spots for bettors" than an actual "places to make bets."

Go deeperArrow2 hours ago - Sports

Situational awareness

President Trump and First Lady Melania Trump at the Taj Mahal. Photo: Mandel Ngan/AFP via Getty Images