Applied Materials to Acquire Interest in Flat Panel Display Venture
SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 28, 1999--Applied Materials, Inc. (Nasdaq:AMAT), announced today that it has signed a Letter of Intent to acquire Komatsu Ltd.'s 50 percent interest in Applied Komatsu Technology, Inc.
Applied Materials currently owns a 50 percent interest in Applied
Komatsu Technology, a supplier of fabrication systems used to produce
Flat Panel Displays (FPD). Applied Komatsu Technology was formed in
September 1993 as a 50-50 joint venture between Applied Materials and
Komatsu.
"Significant improvements in overall business conditions and an
increase in demand for FPD manufacturing equipment in Taiwan and Korea
present new opportunities for Applied Materials and contributed to our
decision to purchase Komatsu's interest," said Dr. Dan Maydan,
president of Applied Materials. "These changes in the FPD business,
combined with the increased need for enhanced flexibility and
responsiveness to market changes, were also factors in our decision."
"Komatsu has been an excellent partner in this joint venture, and
has made valuable contributions to Applied Komatsu Technology. In
particular, Komatsu has played a positive role in process improvements
for supplier management, quality and manufacturing operations, which
have benefited both Applied Komatsu Technology and Applied Materials."
The acquisition is expected to be finalized, subject to the
completion of a definitive agreement and the approval of both
companies' Board of Directors, and certain other conditions, prior to
the close of Applied Materials' fourth fiscal quarter of 1999, ending
October 31, 1999. The acquisition by Applied Materials of Komatsu's 50
percent interest in Applied Komatsu Technology is not expected to have
a material effect on Applied Materials' balance sheet or ongoing net
income for the fiscal year 1999. Non-recurring items, including
in-process research & development expense, resulting from this
transaction are not expected to have an adverse effect on Applied
Materials' net income for the fourth fiscal quarter of 1999.
The purchase of Applied Komatsu Technology reflects a change in
Applied Materials' decision in the fourth fiscal quarter of 1998 to
discontinue the operations of Applied Komatsu Technology. Applied
Materials recorded $58 million of losses in the fourth fiscal quarter
of 1998 related to Applied Komatsu Technology, including the operating
losses of Applied Komatsu Technology and charges to discontinue the
operations. As a result of the change in the decision to discontinue
the operations of Applied Komatsu Technology, Applied Materials will
reclassify the operating results of Applied Komatsu Technology to
continuing operations, but there will be no change in Applied
Materials' net income or total earnings per share amounts as
previously reported.
Upon completion of the transaction, the FPD equipment business
will be conducted under the name AKT, an Applied Materials company,
and will continue to focus on chemical vapor deposition systems for
the FPD market. Its operations will be based primarily in the United
States and will support the flat panel display manufacturing industry
worldwide.
This press release contains certain forward-looking statements
that are subject to known and unknown risks and uncertainties that
could cause actual results to differ materially from those expressed
or implied by such statements. Such risks and uncertainties include,
but are not limited to: completion of Applied Materials' due diligence
and acquisition of Komatsu's 50 percent interest in Applied Komatsu
Technology; continued improvements in overall business conditions
within the FPD market; continued increases in demand for FPDs; the
ability of Applied Materials to retain key employees of Applied
Komatsu Technology; the ability of Applied Materials to effectively
integrate the operations of Applied Komatsu Technology; and the
ability of Applied Materials and Applied Komatsu Technology to
leverage capabilities and capitalize on their strengths to better
serve customers. Applied Materials assumes no obligation to update the
information in this press release.
Applied Materials, Inc. is a Fortune 500 global growth company
and the world's largest supplier of wafer fabrication systems and
services to the global semiconductor industry. Applied Materials is
traded on the Nasdaq National Market System under the symbol "AMAT."
Applied Materials' web site is www.appliedmaterials.com.
--30--azs/sf*
CONTACT: Applied Materials, Inc.
Jeff Lettes (editorial/media), 408/563-5161
Carolyn Schwartz (investment community), 408/748-5227
KEYWORD: CALIFORNIA INTERNATIONAL ASIA PACIFIC
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS MERGERS/ACQ