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Micron Technology and Numonyx Holdings B.V. announced today that the companies have signed a definitive agreement under which Micron has agreed to acquire privately held Numonyx in an all-stock transaction valuing Numonyx at approximately $1.27 billion. Numonyx is primarily known for development of phase-change memory.

Under the terms of the agreement, Micron will issue 140 million Micron common shares to Numonyx shareholders, Intel Corp., STMicroelectronics and Francisco Partners. Up to 10 million additional Micron common shares will be issued ratably to Numonyx shareholders to the extent the volume weighted average price of Micron shares for the 20 trading days, ending two days prior to the close of the transaction, ranges between $7.00 and $9.00 per share.

The transaction further strengthens Micron’s position as one of the world’s leading memory companies, with a broad portfolio of DRAM, NAND and NOR memory products and strong expertise in developing and supporting memory system solutions. Micron would also gain increased manufacturing scale globally and access to Numonyx’s customer base, providing significant opportunities to increase multi-chip offerings in the embedded and mobile markets.

“Acquiring Numonyx brings together two memory leaders and positions Micron to offer the most comprehensive, cost-competitive solutions in the industry to a broad range of customers and end-markets,” said Steve Appleton, chairman and chief executive officer of Micron.

While it is completely clear why Micron decided to acquire the company best known for innovative memory architectures and technologies, it is not completely clear why Intel and STM decided to sell off Numonyx. Perhaps, since Intel and Micron operate IM Flash together, it made a lot of sense for the company to get rid of NOR flash business and still have access to innovative memory technologies via IM Flash. At the end, Intel is best known for its fabrication processes, which it contributes to IM Flash, and in exchange it obtains part of IM’s output.

Numonyx entered into this agreement because it believed there was a great synergy between the companies’ product and technology portfolios. Bringing the two memory leaders together will create one of the largest and strongest memory-focused company in the world. The collective product and technology portfolio of the two companies will include DRAM, NAND, NOR and phase-change memory (PCM) technologies.

Numonyx will continue to operate independently from Micron until the transaction is closed. Product supply, research and development as well as roadmaps remain unchanged.

Micron currently estimates that the transaction would be accretive to the company on both free-cash flow and non-GAAP earnings beginning fiscal year 2011. In addition, it is anticipated that the Numonyx balance sheet will be debt-free following closing. The transaction is subject to regulatory review and other customary closing conditions and is currently anticipated to close within three to six months.

Tags: Micron, Numonyx, Intel, STMicroelectronics, DRAM, NAND, NOR, PCM, Business

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