Applied Materials lifts bid for Kokusai to $3.5B

Applied Materials Inc., one of the largest makers of machines used to manufacture semiconductors, said it raised its offer for KKR & Co.- owned Kokusai Electric Corp. by 59%, citing higher valuations in a growing industry. It also extended the closing deadline by almost three months. The U.S. company will pay KKR $3.5 billion, up from the originally agreed $2.2 billion, for Kokusai, Applied said in a filing. The two parties have agreed to a new closing date of Mar. 19 to allow for regulatory approval from China, the final remaining jurisdiction where sign- off is needed.

Applied said the large increase reflects improving demand for chipmaking gear and the earnings prospects for the combined entity, part of a growing trend that’s pushed up the valuations of industry companies. It’s making progress toward getting the green light from China’s State Administration for Market Regulation.