Semiconductor equipment maker Lam Research said it has agreed to take over its rival Novellus Systems for $3.3bn in stock, according to the companies.
The combined businesses will be run under the Lam Research name and Martin Anstice would be its CEO.
Meanwhile, Lam also announced a $1.6bn stock buyback programme.
Under the terms of agreement, Novellus stockholders will receive 1.125 shares of Lam Research common stock for each Novellus share held, or a 28% premium over its Wednesday closing price.
Lam CEO Steve Newberry said that this strategic combination positions Lam Research to lead the development of next-generation semiconductor manufacturing technology and productivity solutions at a time when growing semiconductor demand and increased device complexity are creating significant business opportunities.
Novellus Chairman Richard Hill hailed the takeover as great news for their customers, investors and employees.
The deal, which is expected to be finalised in the second quarter of 2012, could lead to $100m in cost savings on an annualised basis by late 2013.
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