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October 18, 2012

Dutch Company ASML Offers to Buy US Light Beam Company Cymer

The Dutch firm ASML Holding NV, which supplies equipment to semiconductor manufacturers, has offered to buy the United States light-beam technology company Cymer (News - Alert) Inc.  As the biggest of such supplier firms, ASML has the money to go through with such a deal--the company has offered approximately $2.55 billion in cash and shares to Cymer, which has yet to accept.

Before the purchase can be finalized, Cymer shareholders and regulators must approve the specifics. ASML’s offer comes down to about $20 USD in cash and 1.1502 ASML shares per Cymer share, which represents a 61 percent premium to Cymer’s average closing price, as measured over the last month.  Tuesday’s closing price came to $47.83 USD.

The Cymer technology that most interests ASML involves the mechanics behind producing a focused beam of light. ASML uses these beams in their machines which trace out circuits of computer chips, so the benefits of the deal could be significant.

ASML is also a key supplier for many of the biggest chipmaker companies, such as Intel Corp., Samsung Inc., and Taiwan Semiconductor Manufacturing (News - Alert) Co., all three of which purchased stakes in ASML this year. The potential deal is on shaky ground currently, however, as the market for computer chips has been in decline recently.

On Wednesday, ASML reported its third quarter earnings, which totaled to €322.6 million ($422.4 million USD). This number is a decrease from the company’s total as of the same time last year, at €350.1 million. What’s more, sales have fallen 16 percent overall, to €1.29 billion.

ASML’s CEO Eric Meurice commented on the numbers, saying the chipmakers--which constitute ASML’s customers--are currently uncertain over the future demand for chips made for the smartphone and tablet market. He noted that the market for desktop computer chips is weak, and that demand for memory chips will likely be “subdued” for the first part of 2013.  There is a light at the end of the tunnel, however, as the demand for logic chips is, in contrast, steadily growing.

Edited by Amanda Ciccatelli

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