Samsung, Rambus settle in $900 million deal, shares leap

SAN FRANCISCO Tue Jan 19, 2010 8:48pm EST

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SAN FRANCISCO (Reuters) - Samsung Electronics Co Ltd (005930.KS) and Rambus Inc (RMBS.O) have ended their legal battles with a settlement worth potentially $900 million that nets Samsung a sizeable stake in the company.

The settlement is expected to apply pressure on Micron Technology Inc (MU.O) and Hynix Semiconductor Inc (000660.KS) -- Samsung's fellow defendants in a Rambus suit accusing them of price fixing -- to also settle.

Shares in Rambus surged more than 14 percent. Los Altos-based chip designer Rambus accused Samsung, Micron and Hynix of colluding to fix prices, hurting sales of Rambus' RDRAM memory chips for computers.

But Micron spokesman Dan Francisco said Samsung's settlement had not affected their stance that Rambus allegations were "baseless", and will not affect litigation efforts.

Micron's shares were down more than 3 percent after hours.

Rambus and Samsung said in a statement on Tuesday their agreement included a quarterly payment from Samsung to Rambus of about $25 million for the next five years -- almost doubling Rambus quarterly sales, which came to $28 million in 2009's third quarter.

The agreement also calls for Samsung to pay $200 million for 9.57 million Rambus shares, giving the Korean company a stake in the U.S. one of 8 percent to 9 percent. And Samsung will also pay an initial $200 million of cash to Rambus.

In total, the deal could be worth $900 million over five years for Rambus. The statement did not mention similar talks between Rambus and Micron or Hynix.

While the agreement ends all legal battles between the two companies, Rambus representatives said that Samsung is not admitting guilt, nor will the memory manufacturer be required to cooperate against the other two defendants in court.

"They have taken a license from us going forward for five years, and we are receiving a lot of money and we are really pleased with that result, and don't need an admission of liability from them in the process," said Rambus General Counsel Thomas Lavelle.

Rambus "certainly would like to" be in talks with the other two defending companies, he added.

Rambus stock often swings on news about its legal disputes. Its shares rocketed 14 percent in after-hours trading to $24.08, after closing at $21.13 in regular trading on the Nasdaq. Micron shares were down 3.4 percent in post-session trades after closing at $10.28.

(Editing by Bernard Orr)

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