Versum Materials Inc. is in advanced talks to combine with Entegris Inc., in a deal that would unite two chemical companies that make critical components for the semiconductor industry.


VSM, +4.91%

  and Entegris

ENTG, +1.33%

  are nearing agreement on a stock-for-stock merger that could be announced Monday, according to people familiar with the matter. There is, however, no guarantee the talks won’t falter before a final deal is reached.

Should they consummate a deal, it would create a company with a current market value of nearly $8 billion that supplies products for purifying, protecting and transporting materials used in the manufacturing process in the semiconductor and other high-tech industries.

Entegris, with a market value of $4.4 billion and based in Billerica, Mass., is no stranger to dealmaking. The company was founded in 1966 as Fluoroware. Following a merger 20 years ago, it rebranded as Entegris and went public soon thereafter, in 2000. Five years later, the company expanded through another merger, this time with Mykrolis Corp. In 2014, Entegris bought electronic-chemicals supplier ATMI Inc. It now has about 3,500 employees.

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