Elpida Preparing Micron Nanya Deal – February Closure?
1/27/2012 by: Gil Russell
Nikkei Business Daily reported today that Japan’s last remaining DRAM memory manufacturer, Elpida Memory Inc., presented a broad based recovery plan based on a partnership with Micron Technology and Nanya Technologies in a meeting with lenders on Wednesday.
The lenders have given Elpida President Yukio Sakamoto until next month to come up with a satisfactory recovery plan that according to sources is based upon the outcome of talks with Micron and Nanya. The lenders originally demanded the plan in January but negotiations with potential partners ran into problems that needed additional time to work out according to sources.
According to sources, Elpida is technology rich but is currently cash poor. The company has determined to remain independent; in essence, Elpida is selling the resistive memory technology as a lead technology item to the potential investors for a minority stake in the company and offering a continuing R&D partnership in the technology.
Elpida has made a request for an investment from Micron and intends to sign an memorandum of understanding with the company at the beginning of the next month the daily reported. This is not a merger, though - but rather a joint venture.
Micron is conducting due diligence in preparation and has selected Goldman Sachs Japan as its financial adviser for the negotiations. Elpida has contracted Mitsubishi UFJ Morgan Stanley Securities according to Nikkei.
Elpida is considering a private placement of new shares with Micron and expected to raise the maximum number of shares for the transaction, the daily said. Elpida will enter into talks regarding further capital investment from Nanya’s parent, Formosa Plastics Group, once the deal receives initial approvals according to Nikkei.
The triumvirate alliance "can become the sole force that can take on Samsung" if the alliance makes Taiwan their main manufacturing base and mass-produce cutting-edge DRAMs at low cost there, an Elpida spokesman told Nikkei.
Neither Elpida nor Micron commented on these developments. Stay tuned to BSN* for further updates...
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