Applied Materials (AMAT) to Merge With Tokyo Electron

NEW YORK (TheStreet) -- Semiconductor manufacturer Applied Materials  (AMAT) and Tokyo Electron announced the two companies will form one, in a $29 billion all-stock merger. The merger is expected to finalize in the middle to second half of 2014.

"It's a huge deal - one that would create a powerhouse and give this semiconductor-equipment company a high level of clout with their chief customers, Intel (INTC) and Samsung," said Jim Cramer in his premium 'Real Money' column.

The merger, unanimously approved by both companies' Boards, will see dual headquarters in Tokyo and Santa Clara, California. Tokyo Electron chairman and CEO Tetsuro Higashi will become chairman of the yet-to-be named company, and Applied Materials CEO Gary Dickerson will be CEO.

"We believe the combination will accelerate our momentum for profitable growth, increase the value we deliver to shareholders and create great opportunities for our employees," said Dickerson in a joint press release.

According to the agreement, Applied Materials shareholders will have a 68% ownership stake in the new company and receive one share for every share currently held. Tokyo Electron shareholders will have a 32% stake and receive 3.25 shares for every share currently held.

Applied Materials share were 9.1% higher to $17.44 at close of trading and 82.25 million shares changed hands compared to its one-month daily average trading volume of 11.01 million. Overall, Applied Materials led the S&P 500 which was down 0.26%. Tokyo Electron closed 11.72% higher on the Tokyo Stock Exchange.

TheStreet Ratings team rates Applied Materials as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

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