Axcelis Shares Fall 3.4% on $4.4B Veeco Merger Announcement
All-stock deal raises shareholder dilution concerns despite strategic goal of creating a diversified semiconductor equipment leader.
Shares of Axcelis Technologies (ACLS) fell 3.4% in trading after the company to merge with Veeco Instruments (VECO) in an all-stock transaction valued at approximately $4.4 billion. The negative reaction from Axcelis investors highlights immediate concerns about shareholder dilution from the deal, which aims to create a more diversified competitor in the global semiconductor equipment market.
The merger agreement stipulates that Veeco shareholders will receive 0.3575 Axcelis shares for each Veeco share they hold. Upon completion, existing Axcelis shareholders will own approximately 58% of the combined company, with Veeco shareholders holding the remaining 42%. The new entity, which will be led by Axcelis CEO Dr. Russell Low, is projected to have generated $1.7 billion in pro-forma revenue in 2024.
While Axcelis shares declined, Veeco's stock surged more than 7%, reflecting the premium embedded in the offer for its shareholders. The deal's strategic rationale focuses on combining the companies' complementary technology portfolios to expand into high-growth markets like artificial intelligence and power devices. Management anticipates achieving $35 million in annual run-rate cost synergies within two years of closing.
Despite the initial drop in Axcelis' stock price due to , some analysts see long-term value in the merger. Following the announcement, Benchmark analyst Mark Miller , citing the deal's accretive nature and entry into attractive new markets. Analysts at DA Davidson also noted the combination would increase the company's addressable market to around $5 billion.
The transaction is expected to close in the second half of 2026, subject to shareholder and regulatory approvals. The combined company will be headquartered in Beverly, Massachusetts, and plans to adopt a new name and ticker symbol post-merger.