NEW YORK — Lam Research is buying KLA-Tencor for about $10.6 billion, creating a huge player in the semiconductor sector that will rival Applied Materials.
The combined company, to be called Lam Research Corp., will have a market capitalization of around $19 billion, about equal to that of Applied Materials, and says it will serve 42 percent of the wafer fabrication equipment market when the deal closes in the middle of next year.
The offer, for $67.02 per share, marks a 24 percent premium to the closing price for Milpitas-based KLA-Tencor on Tuesday. Fremont-based Lam says it will book $250 million in annualized savings within two years.
The buyout was announced during a round of heightened acquisition activity in the semiconductor sector. Western Digital is buying Milpitas-based SanDisk.
Last week, Dell said it is buying data storage company EMC Corp. for $67 billion, marking the largest deal ever between two technology companies, eclipsing Avago Technologies’ proposed $37 billion acquisition of rival chipmaker Broadcom announced five months ago.
Shares of KLA-Tencor jumped $9.99, or 18.6 percent, to $63.85 in premarket trading while Lam Research shares slipped $1.01, or 1.4 percent, to $69.02.