Chinese regulator holds up Orbotech sale to KLA-Tencor

Orbotech CEO Asher Levy photo: Eyal Izhar

The companies now hope to obtain clearance for the deal, due to have been completed by year-end, "as soon as practicable in 2019."

Nine months have gone by since the news that US company KLA-Tencor would buy Israel's automated inspection equipment company Orbotech Ltd. (Nasdaq: ORBK) for $3.4 billion, a deal that was due to be completed by the end of this year. Today, the companies announced that completion of the deal had been delayed, because of difficulties in obtaining approval from the Chinese regulator.

The companies said today in a statement, "KLA-Tencor continues to have advanced discussions with the State Administration for Market Regulation of the People's Republic of China (SAMR) regarding clearance of the proposed merger involving KLA-Tencor and Orbotech with a goal of obtaining clearance as soon as practicable in 2019."

Orbotech, headed by CEO Asher Levy, develops technology used in the production process of advanced electronic products. KLA-Tencor is a leading producer of equipment for the semiconductor manufacturing industry. It has a market cap of some $13.1 billion.

KLA-Tencor's acquisition of Orbotech is a cash and shares deal. It will pay $38.86 cash and 0.25 of its shares for each share of Orbotech. At the time that the deal was originally reported, the consideration was worth $69.02 for each Orbotech share, and $3.4 billion in total. Since then, in line with the general decline on stock markets, particularly in the technology sector, KLA-Tencor's share price has fallen 27%, so that the consideration is currently worth $60.30 per Orbotech share, or nearly $3 billion in total.

Published by Globes, Israel business news - - on December 24, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Orbotech CEO Asher Levy photo: Eyal Izhar
Orbotech CEO Asher Levy photo: Eyal Izhar
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