NEW YORK (AP) -- Applied Materials Inc. said Wednesday it will buy Varian Semiconductor Equipment Associates Inc. for $4.9 billion, gaining access to a leading supplier of ion implantation equipment used by chipmakers.
Applied, based in Santa Clara, Calif., is paying $63 per share in cash, marking a 55.4 percent premium to Varian's closing price of $40.55 on Tuesday.
Varian, based in Gloucester, Mass., makes equipment that lowers costs and improves the productivity of its customers, Applied Materials says.
Applied expects the deal to boost its adjusted profit in the first year after closing. It plans to finance the purchase with existing cash and debt.
"Varian is a great fit for our strategy to profitably grow share in our core semiconductor business with best-in-class technology and talent," said Varian Chairman and CEO Mike Splinter, in a statement.
In premarket trading, shares of Varian surged 51 percent, or $20.75, to $61.30, while Applied Materials shares added 36 cents, or 2.4 percent, to $15.60.
Applied, based in Santa Clara, Calif., is paying $63 per share in cash, marking a 55.4 percent premium to Varian's closing price of $40.55 on Tuesday.
Varian, based in Gloucester, Mass., makes equipment that lowers costs and improves the productivity of its customers, Applied Materials says.
Applied expects the deal to boost its adjusted profit in the first year after closing. It plans to finance the purchase with existing cash and debt.
"Varian is a great fit for our strategy to profitably grow share in our core semiconductor business with best-in-class technology and talent," said Varian Chairman and CEO Mike Splinter, in a statement.
In premarket trading, shares of Varian surged 51 percent, or $20.75, to $61.30, while Applied Materials shares added 36 cents, or 2.4 percent, to $15.60.