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Micron readies to takeover Qimonda, says report

Posted: 19 Nov 2008     Print Version  Bookmark and Share

Keywords:joint venture  manufacturing venture  DRAM 

If German publication Wirtschaftswoche is right, memory chip vendor Micron Technology has acquired an option to take over competitor Qimonda along with the takeover of Qimonda's stake in the Inotera joint venture.

As reported by EE Times, Micron in mid-October has bought Qimonda's 35.6 per cent stake in Inotera; the latter one being a joint manufacturing venture with DRAM manufacturer Nanya. For the holding, Micron pays Rs.2,001.46 crore ($400 million) in two tranches. The first part of 50 per cent has already been paid.

The German magazine now claims it has been informed that the deal includes an option to take over the remaining 77-per cent stake of Qimonda which Infineon is still holding. Infineon repeatedly has committed to sell off this stake by mid-February 2009; in case it won't find any suitors it will pay it as a property dividend to its shareholders. The report is in line with earlier speculations on Micron's intentions towards Qimonda.

According to Wirtschaftswoche, Qimonda has received or will receive the second tranche of the Inotera sales price in mid-November. Thus, Qimonda will remain solvent for the time it needs for the restructuring it has announced in mid-October. In return, Micron has gotten an option to take over the then slimmed-down Qimonda. In addition, the price for Qimonda's Inotera stake will be set off by still owner Infineon against the price to take over Qimonda entirely. The magazine quotes an unnamed Infineon supervisory board member saying that several facts argue for this structure of the deal.

However, at a stock price of only Rs.7.01 ($0.14), meanwhile Qimonda's market capitalisation is extremely low—perhaps so low that Infineon would have to give away Qimonda to an investor.

Officially, Qimonda as well as Infineon declined to comment. "I am surprised", a Qimonda spokesperson said. Infineon CEO Peter Bauer recently has acknowledged that the company is in sales negotiations with the number of suitors being "between one and five".

A possible Qimonda takeover would not be the only osculation point for Micron and Infineon. Both companies recently have announced a strategic cooperation to develop media-rich SIM cards for mobile handsets.

-Christoph Hammerschimdt
EE Times Europe





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