New York(AP) — Chip maker Cypress Semiconductor is buying flash memory product maker Spansion in an all-stock deal worth $1.59 billion.

Spansion stockholders will get 2.457 shares of Cypress stock for every Spansion share they own. Shareholders of each side will own about 50 percent of the new company, which will keep the name Cypress Semiconductor Corp.

The companies valued the deal at $4 billion. They expect it to close in the first half of 2015, and they expect to cut annual costs by $135 million within three years.

Cypress President and CEO T.J. Rodgers will be CEO of the combined company, which is expected to have $2 billion in annual revenue. Spansion Chairman Ray Bingham will be non-executive chairman.

Cypress shares rose 82 cents, or 7.9 percent, at $11.25 in aftermarket trading. Spansion Inc. shares jumped $3.09, or 13.5 percent, to $25.94.

Spansion is based in Sunnyvale, California, and it had $972 million in revenue in 2013. The company filed for Chapter 11 bankruptcy protection in early 2009 as the global economic slump hurt electronics sales, but it reorganized and its shares were listed on the New York Stock Exchange again in mid-2010.

Cypress is based in San Jose, California, and it had $723 million in revenue in 2013.