Nanya Technology Corp. (???), one of Taiwan's leading DRAM makers, has decided to take a roughly 5 percent stake in a U.S. counterpart, Micron Technology Inc., in a bid to reinforce a bilateral strategic partnership.
Nanya Technology said that it will participate in a private placement made by Micron to invest some NT$31.46 billion (US$996 million) to take a 5.02 percent stake in the U.S. memory chip giant.
The proposed acquisition of a stake in Micron has obtained a green light from a Nanya Technology board meeting held Wednesday, the Taiwanese buyer said.
The move to acquire a stake in Micron is part of a deal in which Micron aims to acquire a 67 percent stake in Taiwan-based Inotera Memories Inc. (???), a joint venture between the U.S. firm and Nanya Technology.
Currently, Micron owns a 33 percent in Inotera, and Nanya Technology has a 24.2 percent stake. Both Nanya Technology and Inotera are DRAM manufacturing arms of conglomerate Formosa Plastics Group (????).
After the buy-out, Inotera is expected to become a wholly owned subsidiary of Micron Semiconductor Taiwan Co., a unit of Micron based in Taiwan. Inotera shares are scheduled to be delisted from the Taiwan Stock Exchange in December, while Nanya Technology is expected to use the proceeds from the disposal of Intotera shares to buy a Micron stake.
According to Nanya Technology, the disposal of Inotera shares is expected to generate about NT$19.94 billion in pretax profit, and the company is planning to book the gains in the earnings report for the fourth quarter.
The deal proposed in June to sell a 67 percent stake in Inotera for NT$30 per share to Micron has been approved by the Investment Commission, and the U.S. suitor remains committed to the acquisition price to complete the acquisition.
In turn, Nanya Technology will purchase 57.78 million Micron shares, or a 5.02 percent stake, at US$17.29 each. The total consideration will reach about NT$31.46 billion.
Through the participation in Micron's private placement, Nanya Technology said that it will gain access to the U.S. firm's high-end DRAM production processes, which is expected to strengthen the Taiwanese memory chip maker's global competitiveness in the long term.
As of 11:34 a.m., shares of Nanya Technology had risen 4.33 percent to NT$40.10 on the local main board, when the weighted index gained 2.47 percent to 9,163.99 in the wake of a strong comeback made by Wall Street overnight.
Source: Focus Taiwan News Channel