ASML Buys Stake in Carl Zeiss Unit for $1.1 Billion in EUV Step

(Bloomberg) -- ASML Holding NV agreed to buy about a quarter of a Carl Zeiss AG unit for 1 billion euros ($1.1 billion) in cash as it begins to develop a new optical system for the next generation of semiconductor machines.

Europe’s biggest semiconductor-equipment maker will acquire the stake in Carl Zeiss SMT and invest 220 million euros in the unit’s research and development and make 540 million euros in other related investments over the next six years, the Veldhoven, Netherlands-based company said in a statement Thursday.

Lithography machines made by ASML use concentrated light rays to burn lines into layers of materials deposited on silicon, a crucial step in creating transistors. So-called EUV machines promise to enable chipmakers to produce smaller semiconductors while increasing the capacity and speed for devices such as handsets and tablets.

“With this agreement we set the right conditions for development of the next generation of EUV by ASML and Carl Zeiss SMT, so that our customers can reap the rewards of their EUV investments up to the end of the next decade,” said Peter Wennink, ASML’s chief executive officer, said in the statement.

Carl Zeiss SMT will pay an annual dividend to Carl Zeiss and ASML. ASML expects the minority stake will boost its earnings per share before adjustments.

The transaction, which has been approved by both companies’ supervisory boards, is set to close in the second quarter and is subject to regulatory approval.

To contact the reporter on this story: Celeste Perri in Amsterdam at cperri@bloomberg.net. To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Ville Heiskanen