November 24, 2009 / 5:58 PM / 9 years ago

UPDATE 1-EU set to accept Rambus antitrust proposals-source

* Settlement to be accepted by regulators next Wednesday

* Will cap certain unit royalties at 1.5 pct to 2.65 pct

* Rambus will offer some older products for free

* Shares up 7.9 pct

By Foo Yun Chee and Ian Sherr

BRUSSELS/SAN FRANCISCO, Nov 24 (Reuters) - European regulators are set to accept a proposal by Rambus Inc (RMBS.O) to cut royalties to settle antitrust charges, according to a person familiar with the situation, sending the shares of the U.S. chipmaker up 7.9 percent on Tuesday.

Under the terms of the settlement, set to be accepted by European Union regulators next Wednesday, Rambus will not be fined and will not be found liable for any wrongdoing, the source said.

The European Commission accused the company in August 2007 of abusing its dominant position by claiming unreasonable royalties after complaints from Germany’s Infineon Technologies AG (IFXGn.DE) and South Korean memory chipmaker Hynix Semiconductor Inc (000660.KS).

Rambus offered in June to cap royalties at 1.5 percent to 2.65 percent per unit for certain types of SDR memory controllers and memory types for five years to settle the charges. The prices are set to drop in April 2010.

“A Commission decision to accept Rambus is expected on Dec. 2,” the source told Reuters, adding there would be no changes to Rambus’s proposals.

Rambus will also offer some of its older products for free as part of the settlement.

“For stockholders it means Rambus will be able to generate higher revenue and profits,” said BWS Financial Analyst Hamed Khorsand.

“Companies have always been on the fence about wanting to take a license, but weren’t certain (Rambus) patents were valid,” he added, saying both U.S. and European regulators found the patents valid, and now companies can get better royalty rates thanks to the settlement.

Embroiled in legal disputes with technology companies around the world, Rambus’s legal costs have jumped to some $300 million since 2000.

It is due to face Micron Technology Inc MU.N, Hynix and Samsung Electronics Co Ltd (005930.KS) in court in January. It has accused the companies of price-fixing and hurting sales of its RDRAM memory chips, which are used in computers.

The U.S. Federal Trade Commission ditched its antitrust complaint against Rambus in May after the Supreme Court declined to hear the FTC appeal in its suit that unsuccessfully accused Rambus of “deceptive conduct.”

Rambus shares were up $1.32 to $18.04 in midday trading on the Nasdaq. (Reporting by Ian Sherr in San Francisco and Foo Yun Chee in Brussels; editing by Jon Loades-Carter and Andre Grenon)

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