The DOJ logo is pictured on a wall after a news conference in New York
The Department of Justice (DoJ) logo Photograph by Carlo Allegri — Reuters

Antitrust Concerns Scuttle Major Chip Industry Acquisition

Updated: Oct 05, 2016 10:51 PM UTC

Semiconductor equipment maker Lam Research said on Wednesday it had terminated a $10.6 billion deal to buy rival KLA-Tencor.

The companies decided against the merger due to antitrust concerns raised by the Department of Justice, according to a statement from KLA-Tencor.

Lam Research agreed to buy KLA-Tencor for $67.02 per share last year, amid a wave of consolidation in the chip industry.

Together, the companies would have commanded a 42% share of the wafer fabrication equipment market.

KLA-Tencor and Lam Research said in August that regulatory clearance for the deal may be delayed beyond Oct. 20.

KLA-Tencor also raised its quarterly dividend by 2 cents to 54 cents per share.

Shares of KLA-Tencor (klac) were down 5.8% in extended trading, while Lam Research's shares (lrcx) fell 2.7%.