Applied Materials Inc and Tokyo Electron Ltd announced a merger that would pave the way for the creation of a USD 29 billion firm. The definitive agreement for the all-stock deal has already been approved by the boards of directors of both firms. The new company would be focusing on the semiconductor and display manufacturing niche. The transaction is set to be completed next year after shareholders' approval from both firms would be obtained. Regulators would also need to review the deal before it could be finalized.

Tokyo Electron Chairman, President and Chief Executive Officer Tetsuro Higashi said the new company was a bold step in the industry. "Built on a foundation of people, technology and commitment, we are creating a truly global company that we believe will expand the value we deliver to our customers and be able to achieve new levels of financial performance," he said.

Meanwhile, Applied Materials President and Chief Executive Officer Gary Dickerson said the merger would rapidly accelerate growth, give value to their shareholders and provide opportunities to their workers.

The new company would have Higashi as the Chairman and Dickerson as the Chief Executive Officer.