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MICRON TECHNOLOGY INC 8-K Report, Material Agreement (Oct 14, 2008)

Filed October 14, 2008For Securities:MU

Summary

Micron Technology Inc. has entered into a significant agreement to acquire a substantial stake in Inotera Memories, Inc. through its subsidiary, Micron Semiconductor, B.V. The deal involves purchasing approximately 1.18 billion shares of Inotera from Qimonda AG and its affiliate for an aggregate gross consideration of $400 million. This transaction represents a strategic move for Micron to gain control over Inotera's operations and leverage its manufacturing capabilities, particularly in stack DRAM products. The acquisition is structured in two closings, with financing commitments of $285 million secured for the second closing. The consummation of the transaction is contingent upon obtaining various regulatory approvals, including from German and Taiwanese authorities, and the establishment of a new joint venture with Nanya Technology Corporation regarding Inotera's future operations. The agreement also includes a technology transfer component and related license agreements, enhancing Micron's technological prowess in DRAM manufacturing.

Key Highlights

  • 1Micron to acquire a controlling stake (approx. 1.18 billion shares) in Inotera Memories, Inc. from Qimonda for $400 million.
  • 2The transaction is structured in two closings, with the second closing subject to financing and regulatory approvals.
  • 3Micron has secured financing commitments of $285 million for the transaction.
  • 4Regulatory approvals are required from German Federal Cartel Office and Taiwan's Ministry of Economic Affairs.
  • 5Micron, Nanya Technology Corporation, and Inotera have entered into a memorandum of understanding for a new joint venture concerning Inotera.
  • 6A Transition Agreement and a Technology Transfer Agreement for 68-50nm DRAM process nodes are part of the deal.
  • 7The acquisition aims to integrate Inotera's operations and technology into Micron's broader strategic objectives.

Frequently Asked Questions

This 8-K filing announces Micron Technology Inc.'s entry into a material definitive agreement to acquire a significant portion of Inotera Memories, Inc. from Qimonda AG. It details the terms of the Share Purchase Agreement, the aggregate consideration, financing arrangements, and conditions precedent for the transaction.

Micron will pay an aggregate gross consideration of $400 million for the shares of Inotera. The company has secured $285 million in financing commitments to help fund the second closing and replenish cash used for the first closing. The acquisition is expected to enhance Micron's manufacturing capabilities and strategic position in the DRAM market.

The consummation of the transaction, particularly the two closings, is subject to several conditions. These include obtaining regulatory approvals from German and Taiwanese authorities, the receipt of necessary financing for the second closing, and the establishment of a joint venture agreement with Nanya Technology Corporation.

Nanya Technology Corporation is a key partner in this transaction. Micron and Nanya have entered into a memorandum of understanding to establish a new joint venture concerning Inotera. They are expected to enter into a formal Joint Venture Agreement by the time of the second closing, outlining their collaboration on Inotera's operations.