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Antitrust Concerns Scuttle Major Chip Industry Acquisition

October 5, 2016, 10:51 PM UTC
The DOJ logo is pictured on a wall after a news conference in New York
The Department of Justice (DOJ) logo is pictured on a wall after a news conference to discuss alleged fraud by Russian Diplomats in New York December 5, 2013. REUTERS/Carlo Allegri (UNITED STATES - Tags: CRIME LAW) - RTX1657T
Photograph by Carlo Allegri — Reuters

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%.