Lam Research has moved to acquire its rival company, Novellus Systems, for $3.3 billion in stock, it has been announced.
The semiconductor companies have said that their merger would result in an organisation, which would retain the name Lam Research and would have a wide portfolio of semiconductor equipment.
Under the terms of the merger, Novellus' shareholders will get 1.125 Lam Research share for every Novellus share that they own. The merger values Novellus shares at $44.42 per share while the entire transaction has been valued at $3.3 billion.
After the transaction is over, Lam shareholders will own 59 per cent of the newly formed company while Novellus shareholders will own a 41 per cent stake.
"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," said Steve Newberry, vice chairman and chief executive officer of Lam Research.
Lam Research also announced a new $1.6 billion stock re-purchase program which would be come into effect after the Novellus merger is completed and will continue to for 12 months after it.