Micron in talks to acquire Elpida, companies say

TOKYO Thu May 10, 2012 3:09am EDT

Elpida chips are seen at an electronic store in Tokyo's Akihabara district April 24, 2012. REUTERS/Toru Hanai

Elpida chips are seen at an electronic store in Tokyo's Akihabara district April 24, 2012.

Credit: Reuters/Toru Hanai

TOKYO (Reuters) - Micron Technology is in talks to acquire Elpida Memory Inc's business, the companies said on Thursday, as the Japanese chipmaker tries to restructure after tough market conditions and stiff global competition drove it into bankruptcy protection.

An acquisition would give Micron a 25 percent share of the global market for dynamic random access memory (DRAM) chips, moving it to second place behind Samsung Electronics. It will also give the U.S. company access to Elpida's technology in chips for smartphones and tablets.

Micron said Elpida had selected it to negotiate a deal following a bidding process, confirming what a source with direct knowledge of the deal told Reuters early this week.

The source had also said Micron offered more than 200 billion yen ($2.51 billion) for Elpida.

U.S. private equity firm TPG Capital LP and China's Hony Capital had also placed a joint bid in the final round on May 4. South Korea's SK hynix, the world's No. 2 global DRAM maker, dropped out of the bidding.

Elpida, Japan's last maker of DRAM chips used mainly in personal computers, filed for bankruptcy protection in February with 448 billion yen in liabilities, in Japan's largest bankruptcy ever by a manufacturer.

Investors have been concerned about how much Micron might pay for Elpida, with its shares losing more than one-fourth of their value since late March when it was first identified as a bidder.

A final restructuring plan for Elpida will require the approval of a Japanese local court and the company's creditors, not all of whom may be happy with the deal.

Last week, a group of Elpida debt holders said they may submit a rival reorganization plan if trustees agreed to a low-ball bid, referring to a previous media report that put Micron's first-round offer at 150 billion yen.

($1 = 79.5500 Japanese yen)

(Reporting by Ayai Tomisawa; Editing by Edmund Klamann and Ryan Woo)

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