NEW YORK (AP) — Lam Research Corp. and KLA-Tencor are scrapping their merger agreement due to antitrust regulators' opposition to the deal that would have combined the two makers of equipment for manufacturing semiconductors.
Lam Research of Fremont, California, had offered about $10.6 billion in cash, stock or a combination of the two, for KLA-Tencor, based in Milpitas, California. The combination announced last October would have created a giant that would have served roughly 42 percent of the wafer fabrication equipment market.
Shareholders of both companies approved the deal in February.
As recently as August, the companies said they were still in talks with the Justice Department and regulators in South Korea, Japan and China.
Lam and KLA-Tencor said Wednesday that no breakup fees will be paid by either company.
Lam Research said that it remains committed to delivering more value to shareholders. It will offer investors an update on its strategy next month.
Separately, KLA-Tencor said that it's raising its quarterly dividend by 4 percent, or 2 cents, to 54 cents, starting with the November payment. The company credited the boost to its strength, cash flow and confidence in its business model.
In after-hours trading, shares of Lam Research dipped 87 cents, or about 1 percent, to $95.30. KLA-Tencor shares slid about 2.6 percent, or $1.86, to $69.35.