Summary
Lam Research Corporation (LRCX) announced on October 20, 2015, its entry into a definitive Agreement and Plan of Merger and Reorganization with KLA-Tencor Corporation. This agreement outlines a two-step merger where KLA-Tencor will become a wholly-owned subsidiary of Lam Research. The transaction is structured as a combination of stock and cash, with KLA-Tencor shareholders having the option to elect their consideration mix, subject to proration mechanisms. This strategic move aims to integrate the operations of two significant players in the semiconductor equipment manufacturing industry. The filing also details the financing arrangements, including a commitment for a $4.2 billion bridge loan facility, and outlines conditions for closing, termination rights, and provisions for board representation post-merger. Investors should monitor regulatory approvals and shareholder votes, as these are key conditions for the transaction's completion.
Key Highlights
- 1Lam Research Corporation (LRCX) entered into a merger agreement with KLA-Tencor Corporation on October 20, 2015.
- 2The transaction involves a two-step merger resulting in KLA-Tencor becoming a wholly-owned subsidiary of Lam Research.
- 3KLA-Tencor shareholders can elect to receive a mix of Lam Research common stock and cash, or opt for an all-stock or all-cash consideration, subject to proration.
- 4Lam Research has secured a commitment for a $4.2 billion senior unsecured bridge loan facility to finance a portion of the acquisition.
- 5The merger is subject to customary closing conditions, including stockholder approvals from both companies and regulatory clearances.
- 6The agreement includes provisions for potential termination fees for both parties under specific circumstances, with a $290 million fee outlined in several scenarios.
- 7Effective upon closing, two KLA-Tencor directors will be appointed to the Lam Research board of directors.