Applied Materials, Inc. (AMAT) To Merge With Tokyo Electron In $29 Billion Deal

Posted Sep 24, 2013

Applied Materials, Inc. (NASDAQ:AMAT) is acquiring their rival Tokyo Electron Ltd in an all-share deal.  The two will merge to become a large company with a combined stock market value at $29 billion.

Tokyo Electron said that they do not expect any anti-trust issues and added there is limited overlap in their product lineups.

For every existing share, Tokyo Electron shareholders will receive 3.25 shares of the unnamed new company.  Applied Materials, Inc. (NASDAQ:AMAT) will receive 1 share.  The deal is expected to close in the second half of next year.

Applied Materials, Inc. (NASDAQ:AMAT) CEO Gary Dickerson will be the CEO of the combined company.  Tokyo Electron President and CEO Tetsuro Higashi will be chairman.  The combined company will have dual listings on the Nasdaq and Tokyo Stock Exchange.

Goldman Sachs and Co was AMAT’s financial adviser for the deal and Mitsubishi UFJ Morgan Stanley Securities Co. was the advisor for Tokyo Electron.

The combined companies are expected to hit $250 million in annualized run-rate operating synergies by the end of their first full fiscal year, according to Reuters.

Disclosure: I interned for Applied Materials in the summer of 2005 for their ETCH division in Austin, Texas.

Correction: A previous version of this article was titled that Applied Materials was buying Tokyo Electron “for $29 billion.” The article has been corrected. We apologize for any confusion.

[Source: Reuters]