Micron Snaps Up Elpida for $750 Million
Micron will have to cover about $1.75 billion of debt that will be paid to creditors in annual installments through 2019. Also, there is a $334 million payment due for a 24 percent stake in Rexchip Electronics from Powerchip Technology. According to Reuters, Elpida owns about 65 percent of Rexchip at this time.
Investors reacted positively to the deal and had sent the company's stock up nearly 5 percent during midday trading. Despite the volume of more than $2.75 billion, the acquisition of Elpida could turn into a bargain for Micron, which had been looking for opportunities to better compete with Samsung. Micron executives said that it would have cost the company at least $6 billion to create manufacturing and market presence it is acquiring through Elpida. The combined Micron/Elpida will own about 24 percent of the DRAM market, according to IHS iSuppli.
In a prepared statement, Micron CEO Mark Durcan said the deal will establish a "industry-leading pure-play memory company."