Micron closes in on Elpida acquisition – report

US-based Micron offered more than JPY200 billion ($2.5 billion) in the final round of bidding last Friday, according to a source cited by Reuters. It also offered to keep the firm's two main plants in Japan open and to retain all employees, at least in the short-term.

Elpida's trustees and management approved Micron's offer, although the restructuring plan will need the permission of a local court and Elpida's lenders.

Hony Capital and TPG Capital were also preparing a bid for Elpida, but it was always expected that they would face significant competition from strategic investors such as Micron. China-based Semiconductor Manufacturing International Corp, Japan's Toshiba Corp and South Korea's SK Hynix have also been circling the asset, although the latter pulled out of the running last week.

Hony's parent company, Legend Holdings, is likely to be concerned about the supply issues that could ensue if Elpida falls into Micron's hands. Legend owns Lenovo Group, which relies on dynamic random access memory (DRAM) chips from Elpida and Samsung Electronics for its computers and smartphones. Price disputes with Samsung, however, have led the Chinese computer producer to rely more on Elpida for supply.

Elpida is the world's third largest chipmaker by market share and its bankruptcy, under debts of $5.6 billion, is the largest ever by a Japanese manufacturer. 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.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

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