Chinese Company Readies $23 Billion Bid for Micron: Reports
Tsinghua Unigroup reportedly is interested in buying the memory chip maker, expanding its capabilities and adding to the consolidation in the market.Chinese state-backed company Tsinghua Unigroup reportedly is preparing to make a $23 billion bid for memory chip maker Micron Technology, a move that would bolster that country's efforts to expand its homegrown technology capabilities and continue consolidation in the chip market. According to multiple reports, the company is looking to offer a per-share price of $21, which would be about a 19 percent premium, and that the offer could come as early as July 14 or 15. A Micron spokesman has said that the chip maker has yet to receive an offer. The first reports of a possible sale came from The Wall Street Journal. It would represent the largest takeover of a U.S. company by a Chinese firm. Micron makes a range of memory chips, including dynamic DRAM and NAND chips, that can be used to store data, such as pictures, on such mobile devices as smartphones, tablets and cameras. Micron officials last month said that in the most recent financial quarter, the company was hurt by the slowing global PC market. Revenue for the three months fell 3 percent from the same period last year, to $3.85 billion, while net income was $620 million, a drop from the $941 million the quarter before.
Tsinghua Unigroup has become a leader in China's efforts to build out the country's IT capabilities, create a globally competitive semiconductor industry and have Chinese businesses use homegrown technologies in their data centers. The company, which spun out of Tsinghua University, last year bought Chinese chip designers RDA Microelectronics and Spreadtrum Communications for $1.6 billion. Intel in September 2014 announced it was investing $1.5 billion in Tsinghua, a move that gave the giant chip maker a 20 percent stake in the company and furthered its ambitions in the increasingly important Chinese market.