US companies Entegris and Versum Materials are combining in a “merger of equals”, creating a $9 billion specialty materials company for the semiconductor and other high-tech industries.

Under the terms of the deal, Versum shareholders will receive 1.12 shares of specialty chemicals and materials company Entegris for each Versum share. This will give Entegris shareholders a 52.5% stake in the combined company with Versum holding 47.5%.

Headquartered in Tempe, Arizona, Versum was once the electronic materials business of Air Products & Chemicals before it was spun off in 2016.

The merged group will retain both the Entegris name and its headquarters in Billerica, Massachusetts, while maintaining a strong operational presence in Tempe.

The transaction is expected to close in the second half of 2019, subject to the usual conditions as well as shareholder approvals and regulatory clearance. The boards of directors at both companies have unanimously approved the merger.

Entegris’s current CEO Bertrand Loy and chief financial officer (CFO) Greg Graves will remain in their respective roles in the merged group. Versum’s current chairman, Seifi Ghasemi, will serve as chairman of the board of the newly formed company.

“This merger will create greater benefits and growth opportunities than either company could have achieved on its own,” said Versum’s president and CEO, Guillermo Novo. “It dramatically accelerates our goal of portfolio diversification – creating an end-to-end materials solutions provider across the entire semiconductor manufacturing process.

The companies said they have highly complementary portfolios, which when combined will provide a diversified suite that includes advanced materials, specialty gases, microcontamination control, advanced materials handling, and delivery systems and services.

The merger is anticipated to generate annual cost synergies of more than $75 million in manufacturing, logistics, procurement, selling, and general and administrative functions during the 12 months post closure. In addition, it expects to realize “significant” revenue growth synergies from cross-selling opportunities.