Applied Materials (AMAT) Merger Delay Not a Complete Surprise, BofA/Merrill Lynch Says

BofA/Merrill Lynch analyst Krish Sankar weighed in on Applied Materials (NASDAQ: AMAT) amid news that the proposed merger with Tokyo
Electron (TEL), originally scheduled for closing by end of CY14 may extend into C1Q15.

Sanka said this is not a complete surprise, and they were baking in a 1Q15 timeframe.

"So was the merger-arbitrage market, discounting a ~60% probability of the merger closing by CY14. It appears that some of the arb investors are more concerned about the deal getting done rather than the timing. We maintain our view that the deal should close; from a fundamental stand-point there is minimal product overlap, especially on the semiconductor side."

The firm maintained a Buy rating and price target of $25.

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.

Shares of Applied Materials closed at $21.25 yesterday.

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