ASM rejects Applied’s offer for ALD, PECVD businesses

Even though ASMI rejected Applied’s offer, it did say that it is willing to explore and discuss with Applied whether any alternative arrangements between the companies could be pursued in a way that would be beneficial to ASMI and its stakeholders.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 6/16/2008

Following the recent unsolicited offer by capital equipment giant Applied Materials Inc to Bilthoven, the Netherlands-based semiconductor manufacturing equipment company ASM International (ASMI) for its atomic layer deposition (ALD) and plasma enhanced chemical vapor deposition (PECVD) businesses with a value between $400 to $500 million, ASMI announced Sunday that its management board and supervisory board have duly and carefully considered the indicative offer, and have no interest to sell the ALD and/or PECVD activities.

ASMI reminded that the ALD and PECVD businesses are an integral part of its front-end business, are at the heart of the company’s strategy, and are the key drivers underlying ASMI's goals to achieve significant growth in revenues and operating margins by 2009.

However, ASMI did say in a statement that it is willing to “explore and discuss with Applied Materials whether any alternative arrangements between ASMI and Applied Materials could be pursued in a way that would be beneficial to ASMI and its stakeholders.”

As a result of ASMI’s response, Applied reiterated in a statement that its non-binding proposal to the supervisory board of ASMI for the possible acquisition of the business units remains open, despite the supervisory board's rejection of the offer and counter-reply.

Applied reminded its proposed purchase price is between $400 and $500 million in cash.

Further, Applied said it believes that completion of a transaction along the lines of its proposal would provide substantial value to ASMI and its shareholders, customers and employees. Specifically, the transaction would provide value well in excess of the negative value which has been attributed to ASMI’s entire front end business for significant periods during the past three years and infuse a significant amount of cash into ASMI that could be used for the benefit of ASMI’s stakeholders, Applied said.

In addition, Applied believes that the strategic fit between ASMI’s ALD and PECVD businesses would allow Applied to deliver the best value for the businesses and that it would provide an excellent environment for the businesses for the benefit of customers, employees and other stakeholders.

Finally, Applied said it welcomed the statement made by ASMI’s supervisory board regarding its willingness to explore possible alternative arrangements between the companies, and has a strong interest in meeting with ASMI early this week to discuss possible transactions, including its proposed transaction, to begin due diligence and to arrive at a solution that delivers the most compelling value to ASMI and its stakeholders.

By working collaboratively, Applied concluded that the parties could reach final agreement and an executed transaction in a matter of weeks.