Deal confirmed: Micron acquires Elpida for $2.5 bn

US/JAPAN: After all the speculation about Elpida’s acquisition, the curiosity of market analysts and stock watchers has now come to an end. Micron has finally confirmed that it is buying Elpida and will support the bankrupt company for $2.5 billion.

Elpida has a 65 per cent stake in Rexchip and Micron has confirmed that it will buy 24 per cent share Rexchip Electronics from Powerchip technology for about $334 million.

The acquisition would double the manufacturing capacity of Micron and take its share of the global D-Ram market to 24 per cent, surpassing South Korean rival Hynix’s 23 per cent. As per the agreement, Micron will pay 140 billion yen (about $1.75 billion) paid in annual installment payments through 2019 and will acquire 100 percent of the equity of Elpida for 60 billion yen (about $750 million) to be paid in cash.

"We are creating the industry-leading pure-play memory company," said Mark Durcan chief executive of Micron Technology.

Through this acquisition, Micron can encash Elpida’s strong presence in mobile DRAM which primarily targets smartphones and tablets. With its strong presence in the enterprise DRAM for PCs, servers, NAND and NOR non-volatile memory, this acquisition is seen as an add on to Micron.