Micron to Buy Bankrupt Elpida Memory for $750 Million
The deal, which will double Micron's DRAM chip production capacity, also obligates the company to support Elpida's operations and employees.Micron Technology announced it would purchase struggling Japanese dynamic RAM specialist Elpida Memory, which focuses on chips for smartphones and tablets in addition to computers, for $750 million. The transaction, labeled a sponsor agreement, will double Microns share of the DRAM market. The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures and to maintain Elpida's operations and employees. Micron also announced a separate agreement with Powerchip Technology Corp., a Taiwanese company, and some of its affiliates to acquire Powerchip's 24 percent share of Rexchip Electronics Corp. for approximately $334 million. Elpida, a supplier for Apple and other PC OEMs owns about 65 percent of Rexchip. Together with the Rexchip shares acquired from Powerchip, Micron will control approximately 89 percent of Rexchip's outstanding shares. Both transactions are expected to close in the first half of calendar 2013.
"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. Joining with Micron also delivers a clear advantage for Elpida's customers, suppliers and employees," Yukio Sakamoto, co-trustee of Elpida, said in a prepared statement. "The transaction is a strong testament to the value of Elpida's technologies, products and people, and it will result in a combined organization that can best serve customers with broader memory solutions, strength and scale."