Tokyo Electron plunges 15% after scrapped merger with US rival

Tokyo Electron shares plunged almost 15 percent Tuesday after US competition regulators blocked a multi-billion-dollar merger between the Japanese semiconductor equipment maker and American rival Applied Materials.

Tokyo Electron Tokyo-listed shares faced huge selling pressure from the opening bell, losing 14.81 percent to close at 6,557.0 yen ($55) after the announcement on Monday.

In the US, Applied Materials tumbled 8.39 percent to $19.97.

The California-based firm said it had called off its nearly $10 billion bid for Tokyo Electron, first announced in 2013, after proposed tweaks to the deal had failed to convince antitrust officials at the Department of Justice.

The deal would have combined two leading makers of semiconductor manufacturing equipment.

"Investors are disappointed. People expected the merger to create a market leader," Mitsushige Akino, executive officer at Ichiyoshi Asset Management, told Bloomberg News.

"Now Tokyo Electron has to find a way to go it alone. If it doesn't, we can expect the shares to fall."

Tokyo Electron said its board agreed to the cancellation because "there remains a gap between the view of Tokyo Electron and Applied Materials and the view of the United States Department of Justice, and it became apparent that such a gap will not be able to be bridged".

The announcement came days after cable and broadband Internet giants Comcast and Time Warner Cable scrapped plans for a $45 billion mega-merger due to opposition from the DoJ.