UPDATE 2-SK Telecom agrees to buy Hynix control for $3 bln

Mon Nov 14, 2011 4:59am EST

* SK Tel buys control of the world's No.2 memory chipmaker for $3 bln

* Deal ends creditors' years of struggle to find a new owner

* S&P places SK credit ratings on negative outlook

* Hynix shares close up 3.5 pct, SK Tel down 0.3 pct (Recasts with official announcements)

By Ju-min Park

SEOUL, Nov 14 (Reuters) - South Korea's SK Telecom has agreed to buy a 21 percent of Hynix Semiconductor for $3 billion in its biggest ever acquisition that will help the creditors-turned-shareholders find a new owner for the chipmaker after years of failure.

The 3.4 trillion won ($3.0 billion) deal comprises of SK Telecom paying 2.3 trillion won to Hynix and the remaining 1.1 trillion won to nine shareholders of the world's No.2 computer memory chipmaker.

"With the fresh fund, Hynix will be able to improve its financial stability and continue to invest to raise its competitiveness... SK Telecom's focus will remain on enhancing Hynix's corporate value," the country's top mobile carrier said in a statement.

Ratings agency Standard & Poor's Ratings Services, however, on Monday placed SK Telecom on a negative outlook, saying the takeover could hurt the firm's credit quality.

"Although Hynix maintains a strong position in the global memory semiconductor industry, its volatile operating performance and large capital expenditure requirements could undermine SK Telecom's stable cash flows." S&P said.

SK didn't elaborate how it will fund the acquisition.

SK Telecom had offered to buy new shares issued by Hynix at 23,000 won each, or a 7 percent premium to the Nov. 10 closing price, and purchase existing shares from nine shareholders for 24,500 won each, a 14 percent premium.

Creditors saved Hynix from a debt crisis in 2001 and have scaled down their stake in Hynix but failed several times to complete a full sale.

Nine Hynix creditors-turned-shareholders, including Korea Exchange Bank, state-run Korea Finance Corp, Shinhan Bank and Woori Bank have sought to recoup billions of dollars they injected into the debt-ridden chipmaker several years ago following the Asian financial crisis.

Attempts to give management control to a domestic company for fear of a potential leak of advanced technologies has cooled interest in Hynix at a time when investors are avoiding the capital intensive and cyclical memory chip sector.

Shares in Hynix ended 3.5 percent higher while SK Telecom fell 0.3 percent, versus the wider market's 2.1 percent rise.

SK aims to close the deal by the first quarter of 2012.

($1 = 1126.600 Korea Won) (Additional reporting by Hyunjoo Jin; Editing by Jonathan Hopfner and Miyoung Kim)

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