Chip merger mania continues, but this time with a brand new wrinkle, as equipment maker KLA Tencor (KLAC) and Lam Research (LRCX) this morning announced Lam will buy KLA, offering shareholders $67.02 per share, based on a cash portion of $32 and a stock portion of half a share of Lam stock for each KLA share.

The transaction has a total equity value of $10.6 billion. The companies will assume the name Lam Research. KLA holders will own 32% of the combined company. Lam CEO Martin Anstice will lead the combined company, and...