Micron Makes Acquisitions
Micron Technology (NASDAQ: MU) has agreed to buy troubled Japanese rival Elpida Memory Inc. through an agreement that will see the chipmaker spend about $2.5 billion to buy the company’s equity and pay some of its creditors. Micron became Elpida’s financial sponsor in May after the company filed for bankruptcy protection. Micron will acquire the company’s equity for $750 million and pay a total of $1.75 billion in future annual installment payments. All pre-petition debt obligations of Elpida will be discharged under the corporate reorganization proceedings. The agreement also calls for Micron to provide certain financing support for Elpida capital spending and to maintain the company’s operations and employees. Micron Technology has also agreed to acquire Taiwan-based Powerchip Technology Corporation’s 24% interest of Rexchip Electronics Corporation for around $334 million, meaning that Micron will now control approximately 89% of Rexchip’s outstanding shares.