Cohu Inc, a semiconductor testing company, announced that it will buy rival Xcerra Corp for about $796 million.

The development assumes importance because a U.S. security panel blocked Xcerra’s sale to a Chinese state-backed fund two months back, Reuters reported.

The deal comes months after Cohu tried to break Xcerra’s agreement with China’s Hubei Xinyan, citing national security concerns.

“The acquisition of Xcerra increases our addressable market to approximately $5 billion across handlers, contractors, test and inspection,” Cohu’s President and CEO Luis Muller said.

The deal is expected to immediately add to Cohu’s earnings and generate over $20 million of annual run-rate cost savings within 2 years of closing. Xcerra shareholders are expected to own about 30 percent of the combined company.

The previous deal to buy Xcerra by Hubei Xinyan was seen as a key test of the ability of Chinese firms to acquire U.S. technology assets, because the company does not make chips itself, but provides testing equipment.