Boston, MA 07/08/2014 (wallstreetpr) – Applied Materials, Inc. (NASDAQ:AMAT) has agreed to join forces with Tokyo Electron under a new brand name known as Eteris. The company said the deal signals a merger of equals.
The companies are involved in making of chip manufacturing equipment, and they believe that coming together will help them support innovation in the industry. They also expected to increase their market share and create the world’s largest maker of chip manufacturing equipment, which is an apparent move by the companies to create more value for their shareholders.
The shareholders from both sides have already approved the merger and what remains is regulatory approval. The companies expect to close the deal in the second half of this year.
The Meaning Behind Eteris
According Joe Pon, Vice President Communications at Applied Materials, Inc. (NASDAQ:AMAT), the name Eteris is a short form of ‘Eternal Innovation for Society.” He said the name is not only warm and confident, but also represents the true aspiration of the two companies as they come together.
Based on the current market valuations, the combined market valuation of the new company will be in the neighborhood of $40 billion.
According to Tetsuro Higashi, CEO of Tokyo Electron, Eteris will be something greater than the sum of the two companies.
The new name is expected to take effect after the merger is closed. The companies are also expected to explore advertising options to publicize the new brand.
Improving Lives
Applied Materials, Inc. (NASDAQ:AMAT) and Tokyo Electron believe their merger will not only improve returns to shareholders but also improve the way people live. The companies expect to demonstrate their commitment to innovation especially in the creation of electronic components that deliver greater power, but with low energy consumption.
Shares of Applied Materials reacted positively to the merger story, gaining on Monday to close at $22.96 per share.
Analysts at JPMorgan Chase & Co. (NYSE:JPM) upgraded the stock of Applied Materials, Inc. (NASDAQ:AMAT) to an Overweight and issued a price target of $30 per share. They previously rated the stock Neutral with a price target of $19.
