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Applied Materials to merge with Tokyo Electron

  • Chipmaker Applied Materials (AMAT) will merge with Tokyo Electron in an all-stock combination that values the combined firm at $29B.
  • "The combination will accelerate our momentum for profitable growth, increase the value delivered to shareholders and create great opportunities for employees," AMAT CEO Gary Dickerson says.
  • The terms of the deal call for AMAT shareholders (who will own 68% of the new firm) to receive 1 share of the combined company for every AMAT share they hold.
  • Run-rate operating synergies are expected to be $250M by the end of the first year and $500M in three years.
  • Taking into account a planned $3B buyback, the deal will be EPS accretive at the end of the first fiscal year after closing. (PR)
  • AMAT +3% premarket.
Comments (4)
  • Viper740
    , contributor
    Comments (126) | Send Message
     
    If one side will own 68% of the new entity, how is this a merger and not a takeover?
    24 Sep 2013, 07:24 AM Reply Like
  • ODAMA
    , contributor
    Comment (1) | Send Message
     
    it's just a face-saving statement for Japanese company. I am pretty sure that they spent more times on crafting the deal appearance rather than discussing economic terms...
    24 Sep 2013, 02:41 PM Reply Like
  • ShellyCCC
    , contributor
    Comments (9) | Send Message
     
    How will that effect those of us that own securities with AMAT?
    24 Sep 2013, 08:26 AM Reply Like
  • Altenmausen
    , contributor
    Comments (2) | Send Message
     
    If you own 1 share of AMAT you will own 1 share of the new merged company. I believe the 68/32 split is based on current EV of each company...with a 6% premium being placed on TEL...yeah it's a takeover by AMAT, but when you merge management teams like they are planning on doing, it has less hostile intent.
    24 Sep 2013, 09:48 AM Reply Like
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