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Micron Offers to Buy Bankrupt Elpida Memory for $2.5 Billion
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Micron Technology has announced that it will buy its bankrupt rival, Elpida Memory in a deal valuing the company at around US$2.5 billion.
Micron will pay US$750 million to buy the company, and further payment up to a value of US$1.75 billion will be paid through 2019 from cash flow generated from foundry services provided by Elpida, as a Micron subsidiary.
The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures, subject to specified conditions, and to maintain Elpida's operations and employees.
In a related transaction, Micron also announced today a separate agreement with Tawian's Powerchip Technology to acquire the Powerchip group's 24 percent share of Rexchip Electronics for approximately US$$334 million.
Elpida's assets include a 300 millimeter (mm) DRAM fabrication facility located in Hiroshima, Japan; an approximate 65 percent ownership interest in Rexchip, whose assets include a 300mm DRAM fabrication facility located in Taiwan; and an assembly and test facility located in Akita, Japan. The fab assets of Elpida and Rexchip together can produce more than 200,000 300mm wafers per month, which would represent an approximate 50 percent increase in Micron's current manufacturing capacity.
"We are creating the industry-leading pure-play memory company," said Micron CEO Mark Durcan. "Today's transactions will help strengthen the combined companies' market position in the memory industry through increased research and development and manufacturing scale; improved access to core memory market segments; and additional wafer capacity to balance among DRAM, NAND and NOR memory solutions for the ultimate benefit of Micron and Elpida customers."
Elpida filed a petition for commencement of Corporate Reorganization Proceedings with the Tokyo District Court under the Corporate Reorganization Act of Japan on Feb. 27, 2012.
Tags: [micron technology] [elpida memory] [Japan]
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