Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Lam is acquiring Novellus in an all-stock deal valued near $3.3 billion where Novellus shareholders will receive 1.125 shares of Lam for each Novellus share held. The deal represents a 28% premium over yesterday's close for Novellus.
Now what: The combined company expects to realize roughly $100 million in cost synergies on an annualized basis by the fourth quarter of 2013, and Lam also announced a $1.6 billion stock repurchase program. Lam expects the deal to be accretive to non-GAAP earnings within a year of closing. Lam's leadership in etch and single-wafer cleaning equipment will combine well with Novellus' thin-film deposition and surface preparation technologies, and the combined company hopes to lead the industry's critical technology transitions.
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