Micron beats TPG, Hony to acquire Elpida

Micron agreed to acquire Elpida's equity for $750 million and pay a total of $1.75 billion in annual installment payments. The payments, which are interest-free, will end in 2019. The transaction will make Micron the second largest in the market for memory chips after Samsung Electronics.

"This is a highly attractive deal for Micron," Mark Durcan, chief executive of Micron, said. "The combined company will put us in a stronger position in the memory landscape."

Elpida, Japan's single maker of dynamic random-access memory chips for personal computers, has debts of $5.6 billion. The company, which itself was formed a decade ago through the merger of several struggling chipmakers, got into difficulties due to falling product prices and heavy capital spending.

The company finally filed for bankruptcy protection in late February and reportedly received interests from Hony Capital and TPG Capital, which were said to acquire Elpida in a joint bid, but faced significant competition from strategic investors including Micron, China-based Semiconductor Manufacturing International Corp, Japan's Toshiba Corp and South Korea's SK Hynix.

The transaction between Micron and Elpida may raise concerns for Hony's parent company, Legend Holdings, which owns Lenovo Group, a computer manufacturer that relies on dynamic random access memory (DRAM) chips from Elpida and Samsung Electronics for its computers and smartphones. Price disputes with Samsung have led the Chinese computer producer to rely more on Elpida for supply.

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• Topics
• North Asia
• Technology
• Hony Capital
• TPG Capital
• Japan
• TMT