Applied Materials in takeover of Tokyo Electron

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Tokyo Electron's chairman Tetsuro Higashi said the deal is meant to create a "truly global company" to meet the needs of companies supplying consumer electronics, such as smartphones and tablets.





Morningstar analyst Andy Ng said in a research note that while the deal comes as a surprise, it makes strategic sense at first glance. The companies are two of the three largest chip equipment firms and have fairly broad product portfolios.

As semiconductor technology has advanced, the complexity of chip fabrication has also risen. He argues that by pooling knowledge and expertise, the companies stand to improve their technological advantage.

The companies do have some overlapping products, but Ng said he views the deal as complementary, as their strengths vary.

Shares of Applied Materials jumped $1.45, or 9 percent, to close at $17.44 on the Nasdaq.
