The transaction is expected to close in the first half of 2013
Dutch chipmaker ASML has agreed to acquire the US based Cymer for €1.95bn to accelerate the development of extreme ultraviolet (EUV) semiconductor lithography technology.
The acquisition will give ASML control over light-based technology requred for making smaller, smarter chips used in smartphones and tablets.
The transaction will also see ASML acquire Cymer's Deep Ultraviolet (DUV) business.
The chipmaker said that it intends to manage Cymer's commercial operations as an independent division based in the US, and will continue to deliver and service DUV and EUV sources for all customers on an arm's length basis.
ASML scanners will continue to interface with light sources from all manufacturers.
The acquisition was made possible by investments from the chipmaker's customers that include Intel, Taiwan Semiconductor Manufacturing Company and Samsung Electronics who agreed to contribute €1.38bn to ASML's research and development.
ASML president and chief executive officer Eric Meurice said that the merger is expected to make EUV technology development more efficient and simplify the supply chain and integration flow of the EUV modules.
"We are also very much encouraged by the opportunities that we expect to create around Cymer's growing advanced Immersion systems and dry DUV Installed Base Products (IBP) business," Meurice said.
The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the first half of 2013.
For the third quarter of 2012, ASML reported sales of €1.22bn, compared to €1.46bn for the same period last year.
The company's net income fell to €275m, compared to €355m during the same period in the corresponding year.