Programmable system-on-a-chip maker Cypress Semiconductor Corp. (NASDAQ: CY) and embedded processor manufacturer Spansion Inc. (NASDAQ: CODE) announced Monday after markets closed that the companies had signed a definitive agreement to merge in an all-stock, tax-free transaction valued at about $4 billion. See how analysts reacted to the merger news.

Spansion shareholders will receive 2.457 Cypress shares for each Spansion share they own. The shareholders of each company will own approximately 50% of the post-merger company. The company will have an eight-person board of directors consisting of four Cypress directors and four Spansion directors. The company will be headquartered in San Jose, Calif., and called Cypress Semiconductor Corporation.

The combined company will be the global leader in NOR flash memories and in SRAM memories. The merger gives Cypress a growth path that may put the stock back on track to its all-time high near $25 a share posted in April 2011.

The merger is expected to result in cost savings of $135 million annually within three years and to be accretive to non-GAAP earnings within the first year after the transaction closes. The combined company will continue to pay the $0.11 quarterly dividend Cypress now pays.

The merger is expected to close in the first half of 2015, following approvals from regulators in the United States, Germany and China. The boards of directors of both companies have unanimously approved the transaction.

The announcement sent Spansion’s shares up nearly 9.5% in Monday’s after-hours trading session to $25.00, a new 52-week high if it holds through Tuesday’s opening bell. The stock’s current 52-week range is $12.12 to $23.94.

Cypress shares were unchanged in after-hours trading, having closed down 1.6% at $10.43 in a 52-week range of $8.4 to $11.30.

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