Applied Materials to acquire Varian Semiconductor for $4.9 billion

Applied Materials Inc, the largest producer of chip-making equipment yesterday said that it will acquire Varian Semiconductor Equipment Associates Inc. for $4.9 billion in cash in order to consolidate its leadership in wafer fabrication equipment (WFE).

Santa Clara, California-based will pay $63 per share in cash, representing a steep premium of 55 per cent to Tuesday closing price of $40.55, or a 38 per cent premium to Varian's 30 day average closing price. 

With 2010 revenues of $9.549 billion, Applied Materials is the global leader in providing innovative equipment, services and software to enable the manufacture of advanced semiconductor, flat panel display and solar photovoltaic products. Its technologies help make innovations like smartphones, flat screen TVs and solar panels.

The acquisition will extend Applied's leadership in wafer fabrication equipment (WFE) with the addition of the technology leader in ion implantation - a critical step in integrated circuit manufacturing. 

Varian's ion implant products complement Applied's Silicon Systems Group's suite of products in the areas of transistor, interconnect, wafer level packaging and patterning.

The combined company will provide customers a broad product portfolio for transistor formation, enabling the manufacture of higher performance chips particularly for mobile applications with faster speeds and longer battery life.  In addition, Varian's technology has strong potential to extend into adjacent markets, including solar, display and light emitting diodes.