STEAG to Acquire AG Associates

STEAG Electronic Systems and AG Associates, Inc. today jointly announced that they have entered into a definitive agreement for STEAG to acquire all of the outstanding shares of AG Associates for $5.50 per share in cash, which represents an approximate 26% premium over the closing price of the AG Associates common stock on Friday, Jan. 15, 1999.

According to the agreement, a wholly owned subsidiary of STEAG will commence a cash tender offer for the outstanding shares of AG Associates common stock no later than Jan. 26, 1999. Following the completion of the tender offer, STEAG intends to merge the existing subsidiary with and into AG Associates. AG Associates will then become a wholly owned subsidiary of STEAG.

AG Associates' Board of Directors has unanimously approved the acquisition and has resolved to recommend to the shareholders that they accept STEAG's tender offer and tender their shares.

Consummation of the acquisition is subject to customary conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

AG Associates is a leading supplier of rapid thermal processing (RTP) equipment to the worldwide semiconductor industry.

STEAG Electronic Systems is a leading supplier of RTP and wet processing systems for semiconductor and silicon wafer production.

For more information: Kirk Johnson, AG Associates. Tel: 408-935-2004.