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Intel Corp. today announced that the company has finalized and closed its transaction with STMicroelectronics and Francisco Partners to create a new independent semiconductor company Numonyx B.V. that will design, develop and manufacture NOR and NAND flash memory products in addition to phase-change memory devices in future.

As part of the transaction, Intel has transferred the assets associated with its NOR flash memory business and certain assets related to the company’s phase change memory initiatives to Numonyx in exchange for 45.1% ownership in Numonyx. STMicroelectronics acquired a 48.6% ownership interest in Numonyx. Francisco Partners acquired a 6.3% ownership interest in exchange for a cash investment of $150 million.

As part of the overall transaction, Numonyx will receive $450 million of debt financing at closing from Intesa Sanpaolo S.p.A and Unicredit Banca d'Impresa S.p.A in addition to a $100 million committed revolving credit facility. The loan has a 4-year term and Intel and STMicroelectronics have each provided Numonyx and the banks with a guarantee of 50% of the indebtedness.

Earlier this year Intel and STMicroelectronics started to sample code-named Alverstone device that uses phase change memory (PCM), a promising new technology providing very fast read and write speeds at lower power than conventional flash, and allows for bit alterability normally seen in random access memory (RAM). PCM has long been a topic of discussion for research and development, and with Alverstone, Intel and STMicroelectronics are helping to move the technology into the marketplace.

Intel estimates that it will record additional non-cash impairment of approximately $300 million related to the assets transferred to Numonyx and other costs associated with this transaction in the first quarter of 2008. Approximately 2500 Intel employees are joining Numonyx as part of this transaction.

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