In a deal that would be one of the biggest-ever foreign takeovers of a Japanese firm, Applied Materials Inc. agreed to acquire Tokyo Electron Ltd. to create to create a powerhouse provider of chip manufacturing equipment.

The all-stock deal announced by the two companies on Tuesday is effectively a takeover by Applied and values Tokyo Electron at $9.3 billion, a modest premium to its market value of 872.3 billion ($8.8 billion). Shareholders of Applied, valued at $19.7 billion under the deal, will own 68 percent of the new company. Both the CEO and CFO of the new company will come from Applied.

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