Micron to buy troubled Japan chip-maker Elpida

NEW YORK, US: US-based Micron Technology unveiled a deal Monday to buy troubled Japanese chip-making rival Elpida Memory for US$2.5 billion, the companies said on Monday.

Micron, the world's fourth largest maker of microchips, "have signed a definitive sponsor agreement for Micron to acquire and support Elpida" in a plan submitted to Tokyo District Court. Under the agreement, Micron will pay 200 billion yen ($2.5 billion) "to satisfy the reorganisation claims of Elpida's secured and unsecured creditors."

Micron will acquire 100 percent of the equity of Elpida under the deal. That includes $750 million to be paid in cash at closing and the rest in installment payments through 2019.

"As a result of these payments, all pre-petition debt obligations of Elpida will be fully discharged under the corporate reorganisation proceedings," the statement said. "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."

South Korea's SK Hynix, the world's second largest microchip maker, dropped its bid for Elpida earlier this year. Elpida, one of the world's top microchip makers, was delisted from the Tokyo Stock Exchange late March in the biggest corporate failure in Japanese manufacturing history.

The troubled firm, which had stayed alive thanks to a 2009 government-backed rescue plan, filed for bankruptcy protection in late February with crushing debts of 448 billion yen.

Source: AFP