SEOUL -- The big $3 billion-plus memory deal is off, but the reasons are a little unclear.
Micron Technology Inc.'s preliminary agreement to purchase the memory business of Hynix Semiconductor Inc. expired today with the cash-strapped Korean DRAM maker rejecting a restructuring plan proposed by its creditors. Hynix's board of directors rejected the restructuring plan prior to a 6 p.m. deadline today (Korean time), which stopped the transaction from moving forward, according to Micron in Boise, Idaho.
However, news agency reports from Seoul said Hynix's board actually rejected Micron's offer. Hynix's directors reportedly feared that the company would not be able to survive without its core memory operations, according to a news story from Reuters today.
The wire service said top lenders backing the purchase plan were likely to be unhappy with the rejection, and it will be difficult for Hynix to seek additional funding from creditors.
But in a statement issued today, Micron did not mention any rejection of its offer by the Hynix board, and the U.S.-based chip maker only said the deal had expired after the Korean company turned down the restructuring plan approved by its credit council.
Last week, the two semiconductor manufacturers reached a non-binding memorandum of understanding for Hynix to sell its memory business to Micron for 108.6 million shares of stock, valued at about $3.2 billion, and a $200 million investment in Hynix's non-memory chip operations (see April 22 story). The acquisition would have credited the world's largest DRAM supplier, ahead of Samsung Electronics Co. Ltd.
On Monday, Hynix's creditor council narrowly approved the agreement between the Korean company and Micron of Boise, Idaho, opening up the door for the transaction to proceed (see April 29 story). But the rejection of the restructuring plan now means the agreement to sell Hynix's memory business to Micron was no longer effective after today's deadline.
It remains unclear whether or not the two companies intend to resume negotiations after today's deadline.