Micron To Acquire Elpida For $2.5 Billion

Micron Technology and Elpida Memory announced today that the parties have signed a definitive sponsor agreement for Micron to acquire and support Elpida. The agreement has been entered into in connection with Elpida’s corporate reorganization proceedings conducted under the jurisdiction of the Tokyo District Court. Under the agreement, 200 billion Yen (approximately USD $2.5 billion assuming 80 Yen/USD) total consideration, less certain reorganization proceeding expenses, will be used to satisfy the reorganization claims of Elpida’s secured and unsecured creditors. Micron will acquire 100 percent of the equity of Elpida for 60 billion Yen (approximately USD $750 million) to be paid in cash at closing. In addition, 140 billion Yen (approximately USD $1.75 billion) in future annual installment payments through 2019 will be paid from cash flow generated from Micron’s payment for foundry services provided by Elpida, as a Micron subsidiary. As a result of these payments, all pre-petition debt obligations of Elpida will be fully discharged under the corporate reorganization proceedings. The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures, subject to specified conditions, and to maintain Elpida’s operations and employees.