July 2, 2012 – GLOBE NEWSWIRE — Micron Technology Inc. (Nasdaq:MU) will acquire and support bankrupt DRAM maker Elpida Memory Inc.’s assets, paying 200 billion Yen (approximately US$2.5 billion) total consideration, less certain reorganization proceeding expenses. Micron has been the favored candidate to take over the DRAM maker since Elpida declared bankruptcy in Tokyo courts in February.
Micron will acquire 100% of the equity of Elpida for 60 billion Yen (approximately US$750 million) to be paid in cash at closing. In addition, 140 billion Yen (approximately US$1.75 billion) in future annual installment payments through 2019 will be paid from cash flow generated from Micron’s payment for foundry services provided by Elpida, as a Micron subsidiary.
As a result of these payments, all pre-petition debt obligations of Elpida will be fully discharged under the corporate reorganization proceedings. "Micron’s sponsorship of Elpida will enable stable payment of creditor claims and help to streamline approval of the reorganization plan by the creditors and the Tokyo District Court," said Yukio Sakamoto, co-trustee of Elpida.
More to the story:
- Micron’s first offer estimated at US$1.5 billion
- Elpida president, independent attorney co-led bankruptcy proceedings
- Elpida leapfrogs Micron in Q1 DRAM rankings
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. Elpida’s assets include a 300mm DRAM fab in Hiroshima, Japan; an approximate 65% ownership interest in Rexchip, whose assets include a 300mm DRAM fabrication facility located in Taiwan; and a semiconductor assembly and test facility located in Akita, Japan. In a related transaction, Micron also announced today a separate agreement with Powerchip Technology Corporation, a Taiwanese corporation, and certain of its affiliates to acquire the Powerchip group’s 24% share of Rexchip Electronics Corporation for approximately 10 billion NTD (approximately US$334 million). Together with the Rexchip shares acquired from Powerchip, Micron will control approximately 89% of Rexchip’s outstanding shares. The fab assets of Elpida and Rexchip together can produce more than 200,000 300mm wafers per month, which would represent an approximate 50% increase in Micron’s current manufacturing capacity.
The acquisition join’s Elpida’s portfolio of mobile-enabled DRAM chips with Micron’s enterprise DRAM solutions for networking and servers. Micron will also balance its DRAM assets with NAND and NOR Flash memory architectures.
The transactions are subject to certain conditions, including approval by Elpida creditors, the Tokyo District Court, and other customary antitrust approvals. Elpida’s reorganization plan is currently anticipated to be submitted to the Tokyo District Court for approval in August 2012. The transactions are expected to close in the first half of calendar 2013. Micron’s purchase of the Powerchip group’s Rexchip shares will occur upon close of the Elpida transaction.
Elpida Memory Inc. manufactures DRAM chips. Elpida’s portfolio features such characteristics as high-density, high-speed, low power and small packaging profiles. More information can be found at http://www.elpida.com.
Micron Technology Inc. (NASDAQ:MU) manufactures and markets a full range of DRAM, NAND and NOR flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, embedded and mobile products. To learn more, visit www.micron.com.