Applied Materials has signed a definitive merger agreement to acquire Varian Semiconductor Equipment Associates for a total cash purchase price of approximately $4.9bn on a fully-diluted basis.
Varian’s share will be acquired by Applied Materials for $63 per share in cash, which represent 55% premium to yesterday’s closing price, or a 38% premium to Varian’s 30 day average closing price.
On completion of the acquisition, Varian will continue to be based in Gloucester, Massachusetts and operate as a business unit of Applied’s Silicon Systems Group.
Varian will bring its ion implantation technology – a critical step in integrated circuit manufacturing – to Applied Materials that is expected to help the latter in wafer fabrication equipment (WFE).
Customers are expected to benefit from the acquisition as it will offer a broad product portfolio for transistor formation, enabling the manufacture of higher performance chips particularly for mobile applications.
Applied Materials chairman and chief executive officer Mike Splinter said the pace of product innovation is accelerating, requiring devices that are more mobile, more connected and more personalised.
"These global trends are driving our customers to find new solutions for smaller transistors and faster and higher performance chips, while pushing the boundaries of innovation," Splinter said.
"Combined, Applied and Varian will be better positioned to help our customers solve these complex challenges and deliver long-term value to shareholders."
Varian chief executive officer Gary Dickerson said in addition to their combined strengths in the semiconductor space, Applied’s proven capability to extend its technology to adjacent markets like solar and display can help unlock the tremendous potential of ion implantation in these markets.
The transaction is expected to be funded by Applied Materials with a combination of existing cash balances and debt.
