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Intel to buy up to 15% of supplier ASML

by Olaf de Senerpont Domis  |  Published July 10, 2012 at 10:00 AM
Chipmaker Intel Corp. late Monday, July 9, announced a series of agreements with ASML Holding NV that includes a $3.1 billion equity investment in the Dutch chip equipment maker.

Santa Clara, Calif.-based Intel said the pacts aim to quicken the deployment of lithography equipment to develop cutting edge wafer technology. Along with an initial $2.1 billion equity investment, which will give Intel a 10% stake in ASML's pre-transaction issued shares, the chipmaker said it would commit $680 million to R&D funding to assist ASML in accelerating the development of 450-millimeter wafer manufacturing tools.

Intel said it would account for the R&D investment as a combination of R&D expense and pre-payments on future chipmaking tool deliveries.

The second phase of the agreement, which Intel said must be approved by ASML shareholders, includes an additional $1 billion equity investment and $340 more in R&D funding.

If the second part of the deal is approved, Intel will own 15% of ASML's issued shares.

Veldhoven, Netherlands-based ASML said it intends to sell up to a 25% stake to Intel and other chipmakers. ASML said it plans to return the proceeds of the stake sales to investors and use the accompanying R&D funding to develop its Extreme Ultraviolet technology and 450 mm silicon wafer technology. It is in discussions with other customers to strike similar agreements to the one forged with Intel, ASML added.

Taiwan Semiconductor Manufacturing Co. Ltd. confirmed Tuesday that ASML had invited it to become an investor. "We are evaluating the proposal," said TSMC spokeswoman Elizabeth Sun.

For legal counsel, Intel turned to Gibson, Dunn & Crutccher LLP's Russell Hansen, Lisa Fontenot, Linda Lee, Anthony Henke, Alex Claringbould, Benjamin Hershkowitz, Phil Kenny, Paul Issler and Winston Chan. Intel's co-counsel in the Netherlands included Leo Groothuis and Gaike Galenoord of NautaDutilh.

ASML was represented by Skadden Arps Meagher Slate & Flom LLP and De Brauw Blackstone Westbroek.
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Tags: ASML | Intel | M&A | Taiwan Semiconductor Manufacturing Co. Ltd.

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Olaf de Senerpont Domis

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