UPDATE 1-Applied Materials to acquire Tokyo Electron
* Applied Materials shareholders to hold 68 pct of merged co
* Deal to combine two chip equipment makers worth $29 bln
* Applied Materials shares rise 4.8 pct premarket
Sept 24 (Reuters) - Applied Materials Inc, one of the world's biggest producers of chipmaking equipment, will acquire rival Tokyo Electron Ltd in an all-share deal, creating a company with a combined stock market value of $29 billion, the two said on Tuesday.
The surprise move to combine two of the world's biggest chip equipment manufacturers is expected to bolster their position in an industry where growth opportunities have become harder to find.
Tokyo Electron played down possible anti-trust issues, saying there was limited overlap in their product lineups, although David Rubenstein, senior analyst at Advanced Research Japan, said etching and deposition were areas that might grab regulators' attention.
"It's very positive for Tokyo Electron if it goes through (but) you've got all these anti-trust issues with the deal," Rubenstein said.
Applied Materials shares rose 4.8 percent in premarket trade.
For every existing share, Tokyo Electron shareholders will receive 3.25 shares of the as-yet unnamed new company, and Applied Materials shareholders will receive 1 share, leaving the latter with about 68 percent ownership.
The companies expect the deal to close in the middle to second half of next year.
Applied Materials CEO Gary Dickerson will be chief executive of the combined company and Tokyo Electron President and CEO Tetsuro Higashi will become chairman. The companies said in a joint statement they would maintain dual listings on Nasdaq and the Tokyo Stock Exchange.
Goldman, Sachs and Co acted as Applied Materials' financial adviser on the deal while Tokyo Electron was advised by Mitsubishi UFJ Morgan Stanley Securities Co.
The companies expect to achieve $250 million in annualised run-rate operating synergies by the end of their first fill fiscal year.